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BILT Annual Report 2009-10
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Transcript of BILT Annual Report 2009-10
contents
04 • consolidated highlights
06 • chairman’s letter
10 • management discussion & analysis
23 • corporate social responsibility
29 • corporate governance
38 •directors’ report
45 • auditors’ report
financials
48 • balance sheet
49 • profit & loss account
50 • cash flow statement
51 • schedules
71 • balance sheet abstract
74 • consolidated accounts
BALLARPUR INDUSTRIES L IMITED • ANNUAL REPORT 2009–102
board of directors
GAUTAM THAPARChairman
R . R . VEDERAHManaging Director
B . HAR IHARAN Group Director (Finance)
R . K . AHOOJA
SANJAY LABROO
A . S . DULAT
ASH ISH GUHA
DR . PRAMATH RAJ S INHA
A . P. S INGHNominee of LIC
C O M P A N Y I N F O R M AT I O N L I S T I N G O N S T O C K E X C H A N G E S
3COMPANY INFORMAT ION
COMPANY INFORMAT ION
REG ISTERED OFF ICE
P. O. Ballarpur Paper Mills-442 901, District Chandrapur, Maharashtra
HEAD OFF ICE
Thapar House, 124 Janpath, New Delhi-110 001
OPERAT ING OFF ICE
First India Place, Tower-C, Block-A, Sushant Lok-I, Mehrauli-Gurgaon Road, Gurgaon-122 002
AUD ITORS
K.K. Mankeshwar & Co., Chartered AccountantsKingsway, Nagpur-440 001
L IST ING ON STOCK EXCHANGES
The Equity Shares of the Company are listed on the following Stock Exchanges:
BOMBAY STOCK EXCHANGE L IM ITED
Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai-400 001
NAT IONAL STOCK EXCHANGE OF
IND IA L IM ITED
Exchange Plaza, Plot No. C-1, G Block, Bandra Kurla Complex, Bandra (E), Mumbai-400 051
consolidated highlights
Net Sales Increased by 34.3 per cent from Rs. 2824.7 crore in 2008-09 to Rs. 3794.6 crore in 2009-10.
Paper Production Increased by 31.7 per cent from 604,731 MTPA in 2008-09 to 796,718 MTPA in 2009-10.
Operating Profit (PBDIT)Increased by 24.8 per cent from Rs. 655.8 crore in 2008-09 to Rs. 818.4 crore in 2009-10.
Profit before Tax (PBT)Increased by 10.7 per cent from Rs. 252.4 crore in 2008-09 to Rs. 279.4 crore in 2009-10.
Profit after Tax (PAT)Increased by 17 per cent from Rs. 168.3 crore in 2008-09 to Rs.197.0 crore in 2009-10.
Diluted EPSIncreased from Rs. 2.72 in 2008-09 to Rs. 3.11 in 2009-10.
Unit Ballarpur First Prize for Excellence in Environment
Management awarded by the Greentech Foundation, New Delhi.Forest Stewardship Council Chain of
Custody Certification.
Unit Bhigwan Good Green Governance Award from
Srushti Publications, New Delhi.Greentech Environment Award for
environment Excellence and Greentech Safety Award.
Unit ShreegopalForest Stewardship Council Chain of
Custody Certification.
Unit SewaForest Stewardship Council Chain of
Custody Certification.
SFIForest Stewardship Council Controlled
Wood Forest Management Certification.Verification of Legal Origin (VLO
certification) issued by The Rainforest Alliance.
F I N A N C I A L S
A W A R D S & C E R T F I C AT I O N S
4
496,84706-07404,15005-06
3.1109-102.7208-09
4.7607-082.8106-07
2.2505-06
818.409-10655.808-09
714.707-08585.506-07
501.905-06
PAPER PRODUCTION • IN MT
PBDIT • IN RS CRORE
496,84706-07404,15005-06
PAPER PRODUCTION • IN MT
796,71809-10604,73108-09
599,92907-08
3,794.609-102,824.708-092,831.107-08
2,317.806-071,912.705-06
NET SALES • IN RS CRORE
DILUTED EPS • IN RS
5CONSOL IDATED H IGHL IGHTS
6
chairman’s letter
Some nations, though, have done exceptionally well. With 8.7 per cent GDP growth in 2009, and double-digit performance over the last three consecutive quarters, China seems set to hit 10 per cent GDP growth in the calendar year 2010. And having posted 7.4 per cent growth in 2009-10, India ought to be able to grow by at least 8.5 per cent in 2010-11. In general, Asia has shown remarkable rebound. According to The Economist, Indonesia is expected to grow by 5.9 per cent in 2010; Malaysia by 6.8 per cent; South Korea by 6.3 per cent; and Taiwan by 7.7 per cent. These are impressive growth rates.
The importance of Asia is also evident in the writing and printing paper industry. In 2009-10, growth in demand was driven primarily by the emerging Asian economies. The developed world witnessed a contraction in demand, while the Asian pulp and paper market increased its global share to around 39 per cent.
With this backdrop, let me start with your Company’s objective of sustainable growth in scale, size and profitability. There are three critical guidelines that BILT continues to adopt in its growth strategy. These are:
Positioning and operating in markets that
have strong domestic demand. As of now, BILT’s manufacturing facilities are in India and Malaysia. India continues to have one of the lowest per capita paper consumption of around 8 kg. Given India’s growth trajectory and the size of the population, there is considerable scope of steadily growing and developing this market across a wide array of products. The Malaysian market, too, has strong domestic demand.Developing cost effective manufacturing
and distribution. BILT’s production facilities are in low cost economies, namely India and Malaysia. In addition, the Company continues to strive to squeeze out every element of cost in its day to day operations. You will get some details of the management’s initiatives on the cost front
7CHAIRMAN’S LETTER
DEAR SHAREHOLDER As I write, the global recession of 2008–
and its hangover in 2009– seem to be a thing of the past. No doubt,
some parts of the world are still suffering from negative to very low
growth and the Euro area is saddled with relatively poor performance.
My guess is that it will probably not achieve more than 1.5 per cent GDP
growth in 2010. Nevertheless, the worst is behind us.
BALLARPUR INDUSTRIES L IMITED • ANNUAL REPORT 2009–108
in the section on Operations in the chapter on Management Discussion & Analysis. Focusing on technology and innovation.
In a mature industry like writing and printing paper, technology and innovation are critical for reaping incremental benefits. BILT has a strong focus on R&D, which is continuously leveraged to improve operational efficiencies. Your Company continues to be very innovative in marketing. It has actively created new segments, introduced new products and restructured its distribution. These improvements continued through 2009-10 and played a very important role in helping BILT grow or maintain its market share while fulfilling the all important objective of profitability.
A brief outline of your Company’s performance for 2009-10 shows encouraging progress:
Net sales grew by 34 per cent to Rs.3,795 crore.EBIDTA increased by about 26 per cent to Rs.838 crore. PAT (after minority interest and profits of associated companies) rose by 17 per cent to Rs.197 crore.
While the details are given in the chapter on Management Discussion & Analysis, I will highlight some of the underlying developments that have contributed to this performance.
The paper industry is about creating, and making the best use of scale. Not surprisingly, therefore, BILT has been on an expansion drive over the last few years. In India, it has successfully commissioned and started commercial production of 190,000 metric tonnes per annum (MTPA) of additional capacity at Bhigwan; and another 165,000 MTPA of extra capacity at Ballarpur.
These new capacities have come on stream when several other players in India have also increased their scale of operations. It is estimated that some 1.2 million metric tonnes (MT) will be added to the existing capacity of 10.8 million MTPA during the next two years. While there is no doubt about the long term growth in demand, in the short run, this additional capacity does create competitive pressures. In this context, a major achievement for your Company in 2009-10 was to successfully sell almost all its extra output — of around 116,000 MT of new production at Bhigwan and 73,000 MT at Ballarpur — without compromising on pricing. This was achieved by a judicious selection of product mix, creation of new
market segments and enhancing efficiencies of the distribution network to reach a larger market.
This strength of sales and marketing is critical to your Company’s long term goals. It is important that as we continue to strategically develop or acquire new production capacities, we have a team in place that has the ability to profitably sell all that we produce.
Your Company acquired Sabah Forest Industries Sdn. Bhd. (SFI) in 2007. You may recall that in 2008-09, given the demand downturn, operations at SFI were under severe stress. There were losses and large stock pile up.
I am pleased to inform you that the situation has completely turned around in 2009-10. SFI has posted its highest ever revenue and profits. This was achieved through a focused effort at improving internal systems and processes and by strategic market repositioning. A revival in demand in Malaysia also helped in the cause. Today, your Company is well positioned to service the Malaysian and related markets with an operational base that has excellent access to raw materials. I expect SFI to contribute significantly to BILT’s improved performance in the years to come.
I am also happy to report to you that your Company has increased its exports. In 2009-10, some 14 per cent of its output from India was exported. While this is a modest beginning, it has opened doors to several new geographies and created a bridgehead for BILT in new markets. Despite being at a nascent stage, this export growth has given encouragement to the strategic premise of catering to world demand from technologically capable, low cost production facilities.
The other related businesses, including office stationary supplies and retail, have continued to expand according to plan. Some highlights are given below:
The rayon grade pulp business at
Kamalapuram, which was under stress in 2008-09 due to a dip in demand for viscose fibre, its main consumer segment, has recovered and generated profits, thanks to a revival in demand.BILT’s market share in India in the coated
wood-free segment increased from 39 per cent in 2008-09 to 48 per cent in 2009-10.BILT continues to be the largest player in
the uncoated wood-free segment. Within this, it is also the leader in the higher value Hi Bright segment, with a market share of 37 per cent in 2009-10.
Today, your Company is well positioned to service the Malaysian and related markets with an operational base that has excellent access to raw materials. I expect SFI to contribute significantly to BILT’s improved performance in the years to come.
9CHAIRMAN’S LETTER
With its well known brands in the copier
market — Copy Power, Image Copier and BILT Matrix — your Company accounts for a 25 per cent share.Driven by three key brands — BILT Matrix,
Royal Executive Bond and BILT Ten on Ten — your Company’s office supplies and stationery business grew by over 30 per cent, taking the total turnover to Rs.244 crore in 2009-10. Today, BILT’s foray in office supply products has grown to 40,000 outlets across 300 locations in India. Your Company entered the office supply
retailing business with the launch of its first store in June 2008 under the brand name ‘P3’ (Paper, Print and Pens). These are early days. Even so, I am happy to inform you that the business achieved a turnover of Rs. 52 crore in 2009-10, and the management expect to double this in 2010-11. Your Company currently has 11 stores with a plan to add 50-odd stores in the next three years.
BILT has always focused on being a good corporate citizen, and has stressed upon sustainable growth and community development — especially so, given that most of its units are located in deep hinterlands and use natural resources like wood. We continue to stress on corporate social responsibility (CSR). I urge you to read the
chapter on CSR which details some of your Company’s achievement on this front.
In the last few years, your Company launched an extensive programme for growth. This included capacity creation, acquisitions and new market entries. These required many investments and significant capital outlays. As of today, it is clear that BILT has proved its project execution skills. 2009-10 is a step in the right direction. Potential has been converted to value, which is a reflection of your Company’s operating capabilities, marketing skills and financial acumen. As your Company’s Chairman and chief fiduciary, I expect the management to achieve similar, if not better results, in the years to come.
My thanks to all your Company’s employees who have done a marvellous job. And to you, for believing in this business and being with us. We remain committed to enhancing shareholder value in every aspect of the business.
G A U TA M T H A PA R
CHAIRMAN
10
management discussion & analysis
Thankfully, there were some positive signs since October 2009. With a degree of stabilisation in financial markets, there were renewed capital flows, especially into the emerging markets of China and India. The real sector, too, has seen a turnaround. The US has registered a recovery, recording positive growth from Q3, 2009; China recorded 8.7 per cent growth in 2009 and has been showing double-digit growth in the last two quarters; and India has grown by 7.4 per cent in 2009-10, compared to 6.7 per cent a year earlier. There are clear expectations that India will achieve 8.5 per cent growth in 2010-11, and regain its momentum. In the first half of 2010, there has certainly been greater optimism and a revival in business sentiments, particularly in the growing Asian economies led by China and India.
The paper and pulp industry has a strong intrinsic correlation with economic development. And, in line with the macro environment, there has been a gradual improvement in demand through the course of 2009-10. Having said so, the structural changes in the industry has become even more apparent. With demand being subdued, particularly in developed markets, the industry has become much more price sensitive. This has started putting immense pressure on high cost production facilities in these western countries, paving way for low cost producers in the east to increase their exports.
While paper prices improved during 2009-10, the increase was not in line with the price growth seen in raw materials, particularly pulp. In effect, there was a major squeeze in the margin between pulp prices and paper prices, putting a lot of pressure on profit margins of paper manufacturing companies.
Being a leading Indian paper manufacturer with global presence, Ballarpur Industries Limited (‘BILT’ or ‘the Company’) was directly or indirectly affected by all these developments. With manufacturing facilities in India and Malaysia, BILT has a low production cost base with presence in growing markets. This strategic positioning helped the Company deliver much improved results in 2009-10. The Company’s financial highlights are given in Box 1.
There are several factors that have contributed to these results. Most importantly, BILT was successful in selling most of the paper that it produced in 2009-10. And, as on 30 June 2010, there was little finished goods stock with the Company. This is particularly creditable because with the successful commissioning of 165,000 MTPA of additional capacity at Bhigwan and the 165,000 MTPA of additional capacity at Ballarpur in December 2009, there was a need to push significantly higher volumes into the market. And, this was done successfully at a time when other companies in India had also increased their capacities resulting in intense competition. This bears testament to the Company’s ability to create new market segments and effectively position its products providing optimal value propositions to customers.
In addition to catering to the domestic market, BILT also successfully grew its exports. In 2009-10, over 14 per cent of BILT’s total volumes produced in India were exported around the globe. This is a new development and these are early signs of the Company’s ability to leverage opportunities in the global market using its low production cost advantage.
The other significant developments were the turnarounds of both the pulp business at Kamalapuram and the Malaysian operations at Sabah forest Industries (SFI). In 2008-09, operations at Kamalapuram were severely affected by the demand downturn in viscose staple fibres, its core customer segment. With a revival in demand in 2009-10, Kamalapuram more than doubled its output to 85,345 MT and achieved significant efficiency gains from better capacity utilisation.
With improving demand and restructuring of internal operations, SFI had a very good year in 2009-10. It recorded its highest levels of production and profits. With this turnaround, BILT is well positioned to penetrate the South East Asian market through its manufacturing facilities at SFI. Having made significant investments in paper capacity in India, BILT is focusing on its long term strategy of integrated growth by investing in new pulping capacity at SFI. While this investment in increased pulping capacity has
MANAGEMENT D ISCUSSION & ANALYS IS 11
OVERVIEW The global economic slowdown, witnessed since September
2008, continued through the first half of 2009. Most developed economies
registered very low or negative GDP growth. This was particularly true for
countries in Europe where there was a sharp reduction in economic activity.
Even leading emerging economies like China and India too saw a drop in their
otherwise high GDP growth rates.
BOX1 HIGHLIGHTS OF BILT ’S PERFORMANCE IN 09-10 (ON A CONSOLIDATED BASIS)
NET SALES
Grew by 34 per cent to Rs.3,795 crore
PBDIT
Increased by almost 25 per cent to Rs.818 crore
PAT (after minority interest and profits of associated companies) Increased by 17 per cent to Rs.197 crore
DILUTED EPS
Increased from Rs.2.72 in 2008-09 to Rs.3.11 in 2009-10
BALLARPUR INDUSTRIES L IMITED • ANNUAL REPORT 2009–1012
been allocated and the expansion project is well on its way, the Company is also evaluating options for increasing its pulping capacity in India. The integrated growth of pulp and paper helps insulate the Company from divergences in price movements between pulp and paper.
The detailed performance of the paper business, its units and the pulp business are given in the next sections along with brief notes on the development in key support functions like Human Resource Management, Information and Technology (IT), Research and Development, Farm Forestry and Internal Risks and Controls.
PAPER BUS INESS
MARKETS AND PRODUCTS
In line with the trend in the recent past, the global paper market continued to witness a structural shift towards increase in demand in emerging economies, particularly in Asia. In fact, the share of Asia in the global paper market has increased to around 39 per cent in the last few years. Much of this is due to the inherent economic development in these countries accompanied by various changes in usage patterns and levels of technology penetration across different markets. Specifically, in 2009-10, the newer Asian markets emerged faster from the economic downturn of 2008 and recorded growth in paper demand, while the mature developed economies continued to witness a contraction in paper demand.
BILT has been steadily building and increasing its presence in the growing Asian markets. India remains its principal market while the Company also caters directly to the Malaysian and South East Asian markets through its international subsidiary Sabah Forest Industries (SFI).
A significant development for BILT in 2009-10 was the rapid emergence of exports as a contributor to the Company’s revenues. In 2009-10, BILT exported to 86 countries across the globe which accounted for over 14 per cent of BILT’s volumes produced in India. This is a reflection of the Company’s ability to leverage global opportunities emerging from its position as a low cost quality manufacturer.
While the Company has increased its global presence, BILT continued to focus on penetrating the Indian market and strengthened its positioning as a paper Company of the country. Today, India is the 15th largest paper consumer in the world. The total paper consumption in India was close to 9.8 million MTPA in 2009-10. And,
it is one of the fastest growing markets. The market size is expected to increase to 20 million MT by 2020.
This demand growth in India is quite natural. Even within Asia, India still has one of the lowest per capita paper consumption — of around 9 kg. In comparison, Japan has a per capita consumption of 250 kg; Korea stands at 170 kg; China is at around 46 kg; and even Indonesia’s consumption of 22 kg per person is much more than India’s. Clearly, India has a considerable head room for growth. And, given its economic growth and demographic transformation, the Indian market presents tremendous opportunities for paper manufacturers.
While there is considerable scope for growth in the Indian paper market, competition has also increased. From a supply-side perspective, the industry is witnessing large capital investments in capacities. Already, some large new capacities have come into the market including significant increase in capacities of BILT. While demand growth is in line to absorb this increased capacity, competition will certainly increase in the near term. Growing revenues and holding on to market shares will be the key challenges for BILT in the near term.
Broadly speaking, the paper industry is classified into two segments — paper and paperboard (writing, printing, packaging and tissue), and newsprint. BILT operates in the paper and paperboard market, within which it is primarily in the writing and printing paper segment. It continues to maintain a good position in the writing and printing paper industry in India.
Broadly speaking, the paper industry is classified into two segments — paper and paperboard (writing, printing, packaging and tissue), and newsprint. BILT operates in the paper and paperboard market, within which it is primarily in the writing and printing paper segment. It continues to maintain a good position in the writing and printing paper segment in India.
The Company’s writing and printing paper business can be divided into five categories — coated wood-free, uncoated wood-free, copier paper, business stationery and cream-wove. BILT is also into the tissue paper business, which is classified under a separate business division.
Coated Wood-FreeCoated wood-free continued to grow at an estimated rate of 9 per cent to 416,000 MTPA in 2009-10. This includes blade coated, air knife and cast coated products. BILT
A TWO S IDE COATED PAPER
MARKET SHARE
B TWO S IDE COATED BOARD
OTHERS 55
OTHERS 46
BILT 45
BILT 54
MANAGEMENT D ISCUSSION & ANALYS IS 13
continued to develop its market leadership in India in this category. In fact, its market share has increased from 39 per cent in 2008-09 to 48 per cent in 2009-10. Much of this increased market share is the result of the increased capacity of coated paper at Bhigwan, which came on stream during the latter part of 2008-09 and was stabilised through 2009-10.
In the coated segment, the two-side coated paper market grew by 15 per cent to 234,000 MTPA in 2009-10; and the two-side coated board market grew by 10 per cent to 79,000 MTPA. Chart A and Chart B shows shares of 45 per cent and 54 per cent, respectively.
In the coated segment, blade coated products command higher value and accounted for an estimated market size of 370,000 MTPA in 2009-10, or 89 per cent of the total coated segment. Among different blade coated products, the blade coated paper market grew by 15 per cent in 2009-10, while that for blade coated board increased by 10 per cent. With both growth rates being higher than the aggregate growth of coated paper in India, the share of two-side blade coated paper in the overall coated products market in India increased to 56 per cent in 2009-10; while that of blade coated boards increased to 19 per cent during 2009-10.
A significant development that helped the Company support its increased capacities was the dynamic role taken in creating a new market segment within one-side coated paper and boards. Traditionally, this segment was catered to by air-knife coated paper. BILT has redefined this market space by introducing its blade coated premium product. The enhanced value proposition in terms of better performance to price ratio has helped this product gain significant market tractions. The one-side coated market is estimated to be 81,000 MTPA in 2009-10. So far, Blade coated one-side coated market size is estimated 57000 MTPA in 2009-10 and BILT has a market share of 73 per cent.
With a focus on high value added products, BILT continues to concentrate on blade coated products within the coated segment, as reflected in Chart C.
While on one end, BILT continuously focuses on introducing new products, it has also geared itself to compete in this market which is increasingly becoming commoditised. This strategy focuses on reducing costs through larger scale of operations and better efficiencies in production while simultaneously focusing on enhanced customer service through a multi-format distribution network.
Uncoated Wood-FreeDuring 2009-10, the Indian uncoated market — comprising Low Bright and Hi Bright segments — grew by 6 per cent to 1,020,000 MTPA. The market for uncoated wood-free in India is highly fragmented with a multitude of products and manufacturers. The segment is largely restricted to domestic players, and price trends are set by domestic competition.
BILT continues to offer a wide range of products in the uncoated wood-free segment and remains the largest player in this space. While maintaining a presence in each product category, it has laid greater importance on optimising its product mix for greater profitability. With this objective, the Company has been focusing on the higher value Hi Bright segment. Hi Bright, which accounts for around 54 per cent of the uncoated maplitho segment, grew by 8 per cent in 2009-10. Chart D shows that BILT performed well in this segment with a market share at 37 per cent in 2009-10.
Most of BILT’s major brands in this segment maintained their market shares. Sunshine Super Printing Paper used for offset printing has a market share of 10 per cent. T.A. NSD has a market share of 9 per cent, BILT introduced a new brand ‘Bilt Magna Print’, which has acquired a market share of 8 per cent. Other brands of Hi Bright maplitho have 11 per cent market share.
With the commissioning of the new paper machine at Ballarpur in the end of 2009-10, BILT has almost doubled the capacity in uncoated paper that it had built over the five decades. Much of the capacity has been expanded on the higher value segment of the uncoated market. The Company has taken aggressive steps to penetrate the market with the new capacity. There has been an increase in the distributor network and a clear focus exists on pushing products into up-country India. In the highly commoditised uncoated wood-free market, price competition is the key challenge. To counter this, the Company relies on superior delivery processes to differentiate itself from competitors, while keeping its costs aligned to the best in the industry.
Copier Copier is a forward integration of the uncoated wood-free paper segment. This includes maplitho paper cut in sizes and characteristics best suited for desktop printing and copying. Copier is another fast growing segment. The mill packed copier market in India grew by 15 per cent during 2009-10 to 370,000 MTPA.
C BLADE COATED PRODUCTS
MARKET SHARE
D H I BR IGHT UNCOATED
OTHERS 49
OTHERS 63
BILT 51
BILT 37
BALLARPUR INDUSTRIES L IMITED • ANNUAL REPORT 2009–1014
BILT has three brands in the market —Copy Power, Image Copier and BILT Matrix. The Copy Power brand grew by 6 per cent, while Image Copier grew by 17 per cent. Today, Copy Power has a market share of 10 per cent, while Image Copier’s share is 12 per cent. BILT Matrix and other brands sold by BILT through its own retail chain grew by 100 per cent and have a 4 per cent market share.
With a 25 per cent share, BILT remains the second largest player in the Indian copier market. Moreover, with steady ramping up of production, the Company is well positioned to claim market leadership in this rapidly growing segment.
CreamwoveThis is a high volume, low value product segment. In volume terms, it is by far the largest segment in India. This segment is characterised by several producers in the country with sub-optimal capacities, and the market is highly price sensitive. This market is growing at around 3-4 per cent and is estimated to be 1.55 million MTPA in 2009-10.
Strategically, over the years, BILT has focused on moving up in the value chain and stressed on higher value products. Consequently, it has marginalised creamwove capacities. However, the Company recognises that this is a large segment and a major paper player like BILT would ideally like to have a presence in this market. Thus, it continues to explore different strategies and opportunities to develop its presence in this market, but without sacrificing returns.
Sabah Forest Industries (SFI)In addition to the Indian market, BILT directly operates in the Malaysian market through its subsidiary Sabah Forest Industries (SFI). While there is a degree of integration in the operations of the two companies, from a market perspective, SFI focuses on Malaysia and its neighbouring countries. The uncoated wood-free surface-sized market size in Malaysia is estimated to be around 2,20,000 MTPA, where SFI has a share of 28 per cent. The uncoated wood-free un-surface-sized market in Malaysia is estimated at around 60,000 MT where SFI has 73 per cent share. Having streamlined operations, SFI witnessed a turnaround in 2009-10 and registered an annual domestic volume growth of 30 per cent, which translates into an increased overall market share from 30 per cent to 38 per cent.
Tissue and Hygiene The tissue business displayed encouraging growth in 2009-10. Sales grew by around 60 per cent, which was the highest growth rate recorded amongst all the organised players in the industry. This growth was achieved by expanding the Company’s operations across India, making a strong headway in the institutional market and launching a variety of quality products aimed at discerning consumers.
During 2009-10, BILT also initiated a sustained brand campaign through promotions and road-shows. This is aimed at educating final consumers and developing strong brand equity. On the operations front, vendor strategy was realigned to consolidate the growing volume of business and leverage the higher scale of business to negotiate better buying prices and better quality. This initiative helped offset some of the steep increase in base tissue prices. In addition, the entire supply chain and logistics was also revamped to cater to the higher and wider growth.
OPERAT IONS
BILT’s consolidated paper manufacturing operations span across six production units. Of these, five are in India and one in Malaysia. The Indian units are located at Ballarpur (Maharashtra), Bhigwan (Maharashtra), Shree Gopal (Haryana), Sewa (Orissa) and Ashti (Maharashtra). The Malaysian unit is in the State of Sabah.
All plant-wise developments and production details are given in the next section.
Unit: BallarpurDuring 2009-10, Unit Ballarpur produced 191,294 MT of paper (including trial run). There were significant improvements made in paper quality in terms of brightness, opacity, bulk and shade of paper by using precipitated calcium carbonate (PCC) as filler. A precipitated calcium carbonate (PCC) plant has been setup at site as a satellite plant for in-house requirements.
The mill has changed over to alkaline sizing on three of its paper machines. There was also improvement in ash retention, which has resulted in enhancing the quality of paper while achieving substantial reduction in specific fibre consumption.
There has been a significant increase in capacity of Unit Ballarpur with the installation of a new paper machine, PM-7 which was commissioned by Allimand, France with an installed capacity of 165,000 MTPA. In 2009-10, PM-7 has produced 73,660 MT of
Unit Ballarpur secured the First Prize for Excellence in Environment Management awarded by the Greentech Foundation, New Delhi.
MANAGEMENT D ISCUSSION & ANALYS IS 15
Paper (including trial run production), out of which about 36 per cent paper was exported. The total exports of this Unit was 33,677 MT of paper. The quality produced out of this machine is of global standards in terms of all aspects.
New paper finishing equipments like Globe rewinder, Pasaban Synchro sheeters and Beilomatic ream wrapping machines, Shrink Wrap Bundling Machine and Stretch Reel Wrap Machine have been commissioned to provide better cut and packed paper to customers. This automation has helped in reducing manpower engagement in the mills.
On the product development front, the Unit has successfully manufactured new shades in various products, namely extensible sack craft paper (ESKP) and Maplitho NSD Premium paper to meet customer requirements, in domestic as well as export markets.
At the back-end, bleached pulp production was 116831 MT. Enhanced operational efficiencies resulted in increased pulp production, with uniform brightness and increased viscosity. Pulp mill operations have been further optimised with change in the raw material mix of wood and bamboo. This change has enhanced performance at the paper machines in terms of quality of paper produced.
Resource conservation continued to be a key focus area. Water conservation is a key area where the mill has reduced water consumption to 76 m3/T paper by 3-R (Reduce-Reuse-Recycle) methodology. While the Unit has added additional equipments for improving quality of paper, which has increased electrical load, power consumption was reduced to 1098 kWh/T. This was achieved through implementation of various energy saving innovations across the pulp & paper manufacturing process. Steam consumption was reduced to 3.1 T/T from 3.6 T/T through installation of thermo compressor on PM-6.
Achievements and AwardsThe Mill has implemented 5S initiative
with the help of a renowned consultant to improve overall operations and housekeeping levels.Unit Ballarpur is certified for FSC COC &
CW certificate from the Forest Stewardship Council.Unit Ballarpur is also certified for OHSAS
18001:2007 by DNV. Now, the Unit has a certified integrated management system of ISO 9001:2008, ISO 14001:2004 & OHSAS 18001:2007.
Unit Ballarpur also secured the First
Prize for Excellence in Environment Management awarded by the Greentech Foundation, New Delhi.
Unit: BhigwanThe total production at Bhigwan in 2009-10 was 248,983 MT of coated paper and coated Boards. The existing paper line produced 133,234 MT of coated paper and coated boards - an increase of 9,150 MT over 2008-09. The total export of this Unit was 49,763 MT of paper.
To meet requirements from increased production, a new pasaban Sheeter was installed in the finishing house. In order to handle increased export volumes and to satisfy the demand of customers for bulk packing, a new German make shrink hooding machine was also installed.
The new paper machine line, which was erected and commissioned in a record period of 10 months and started commercial production from the month of March 2009 produced 115,749 MT of coated paper. The ramp up of production in this machine was as per plan and the machine is now operating at full efficiency.
During 2009-10, the Unit has developed some new products. These include LWC 65 GSM, chromo 65 GSM, SBS and playing cardboard. All the new products were well received by the market.
Resource conservation continued to be a key focus area for the Unit. Innovative process changes and further optimization of wet-end chemicals and coating formulation has helped in reducing usage of chemicals and reduction in fibre consumption. A number of energy conservation measures have resulted in significant reduction in power consumption in the existing paper machine from 654 KWH/MT of paper in 2008-09 to 627 KWH/MT of paper in 2009-10. Water consumption in the mill has further reduced from 21.07 M3 /MT of paper in 2008-2009 to 16.65 M3/MT of paper in 2009-10 by various water conservation measures and changes in manufacturing process.
In addition to TQM which has firmly been established in the Unit, the Unit was involved in 5S implementation. The Unit also obtained FSC-COC certification.
These efforts have been recognized at various forums and the Unit has received the following awards in the year 2009-10:
Good Green Governance award from
Srushti Publications, New Delhi.Greentech Environment award for
Environment Excellence.Greentech Safety Award.
BALLARPUR INDUSTRIES L IMITED • ANNUAL REPORT 2009–1016
Unit: Shree GopalDuring 2009-10, Unit Shree Gopal produced 81,181 MT of paper, which was 531 MT higher than the production achieved in 2008-09.
Unit Shree Gopal undertook various quality improvement initiatives to improve customer servicing and satisfaction. Some of these include:
Achieved On Time In Full ( OTIF ) score
consistently above 90 per cent Reduction in customer complaints by 30
per cent in 2009-10Installed new re-winder to improve the cut
quality of reels Installed new single hard nip calendar
to improve paper quality in terms of two sidedness Replaced dryers from bush bearings to
antifriction bearings to avoid oil dripping in paper Installed broke screen with 0.25 mm
slotted basket to improve paper cleanlinessRemoved conventional Duplex sheeters
and increased volume of synchro cut and on line ream packed paper to the market The Unit developed some new products
including MMPP Chaimos for Kuran printing in retail segment for the export market and Sunlit Cartridge.
In the area of environment protection, the Unit has continuously ensured compliance to ‘CREP’ norms and achieved all the norms of treated effluent and boiler stacks emissions well below the norms laid down by Haryana State Pollution Control Board. Overall water consumption in the mills reduced from 125 m3/t to110 m3/t while effluent discharge decreased from 100 m3/t to 80 m3/t. The Unit also installed an online ‘Suspended Particulate Monitor’ (SPM) at all the boiler stacks.
On energy consumption, Unit Shree Gopal achieved major reduction in steam consumption in the recovery section. This reduced Active Alakali from 8.55 t/t in 2008-09 to 7.8 t/t in 2009-10. As a result, overall steam consumption in mills reduced from 8.3 t/t of paper to 8.0 t/t of paper. In addition, overall power consumption reduced by around 180 kwh (approx 20 kwh/t). This was achieved by taking measures like replacing inefficient motors with energy efficient motors in the plant, installing Variable Frequency Drives (VFD’s), Screw compressor at Pasaban sheeter and shutting down of four water tube wells .
A new railway weigh bridge was installed for 100 per cent weighment of Wood/Bamboo rakes at the mill site resulting in
substantial reduction in demurrage charges. Three Diamond make Soot Blowers at ABL recovery boiler was set up. This has resulted in increased run time of boiler from 45 days to 90 days. The failing 317 L lines in Pulp mill was replaced with Titanium, resulting in improved uptime of the plant.
As a part of the management commitment towards system implementation, in 2009-10, Unit Shree Gopal achieved the following in addition to existing Quality system ISO 9001-2008:
ISO 14001-2004 certification
OSHAS 18001-2007 certification
FSC – COC certification
Implemented 5S initiative in Pulp Mill
Unit: SewaDuring 2009-10, Sewa produced 70,143 MT of paper. Major focus was on new product development and brightness improvement at the bleaching stage, which was achieved by changing the bleaching sequence from five stages to four stages and replacing hypo with chlorine dioxide. On the product front, the Unit focused on developing products in close association with the retail business. This included producing high bright in Image Copier and MTV 65 gsm Premium Copy Paper.
In line with BILT’s quest for continuous improvements in the quality of its products, various other quality up-gradation initiatives were also implemented such as installation of caliper profiler, new hot stock screening system in pulp mill, new centri-cleaner system and new chipper for chip quality improvement.
Resource conservation continued to be a key focus area for the unit. Steam consumption reduced from 3.59 MT/MT of paper in 2008-09 to 3.55 MT/MT of paper in 2009-10.
In line with initiatives under the Corporate Responsibility of Environment Protection (CREP) programme, various environmental projects were implemented. In addition, complete revamping and upgrading of the pulp mill is being carried out to switch to an even less polluting bleaching sequence. The Unit has constructed one Engineering Land Fill for solid hazardous waste (ETP sludge) disposal. Moreover, the effluent discharge system has also been revamped.
CertificationsUnit Sewa has been awarded FSC-COC
certification and Upgradation to ISO 9001: 2008
certification during the year 2009-10.
In 2009-10, Ashti produced 55,017 MT of paper, which was 417 MT higher than the output in 2008-09. This increased production has been achieved by improving operational efficiencies and product mix.
MANAGEMENT D ISCUSSION & ANALYS IS 17
Unit: AshtiIn 2009-10, Ashti produced 54,990 MT of paper, which was 1,254 MT higher than the output in 2008-09. This increased production has been achieved by improving operational efficiencies and product mix. After commissioning of the satellite plant of SMI at Ballarpur, the Unit completely changed over to PCC as filler from GCC during the last quarter of 2009-10.
The Unit catered to the retail business by producing around 16,439 MT of paper for the various brands like Ten on Ten, Matrix Premium Multi Purpose Paper (MMPP), Matrix Premium Digital Paper (MPDP) and P3 segment. As a part of a long term strategy, maplitho manufacturing has been reduced from 9665 MT in 2008-09 to 625 MT in 2009-10. A testimony to the unit’s improvements in product quality is the success achieved in exporting 5,368 MT of paper to 39 countries across the globe where there are stricter quality norms.
In addition to the existing paper line, a second line has also been shifted from Unit Sewa and re-commissioned at this Unit enabling it to increase the volume of inside sheeting to 37,155 MT in 2009-10.
As part of management commitment towards systems implementation, in 2009-10, the Unit got recertification of QMS ISO 9001:2008, EMS ISO14001:2004 certification and ISO 18001:2007 certification of OHSAS.
Unit: SFIDuring 2009-10, the focus was to maximize throughput from all sections, reduce variable cost through usage improvement, waste reduction, optimization of chemicals and utilities. The fixed cost was also contained to reduce overall cost of production.
SFI achieved Forest Stewardship Council (FSC) Controlled Wood Forest Management Certification. This certificate is valid for a period of five years during which regular third party audit will be conducted to ensure ongoing compliance to FSC principles. This internationally recognised certificate is applicable to 77 per cent (224,000 hectares) of the forest concessional area under SFI’s management.
FSC is an international organisation that promotes environmentally appropriate, socially beneficial and economically viable management of the world’s forests. The FSC label provides a credible link between responsible management of forests and the production, manufacturing and marketing of wood-based products. This certification enables consumers and businesses to make
purchasing decisions that benefit people and the environment.
In addition, the Verification of Legal Origin (VLO) certification standard issued by The Rainforest Alliance, was also renewed for a period of two years covering the Integrated Timber Complex (ITC) and Forest Operations including the Natural Forest Management area (NFM) and the currently established Industrial Tree Plantations (ITP).
In 2009-10, paper production was 150,127 MT which is about 21 per cent higher than 2008-09. The total export of this Unit was 44,303 MT of paper. There was no annual shut down in 2009-10 and the higher production was achieved through improved downtime, fewer finishing losses, higher machine efficiency and optimizing & improving synergy among various operations of the mill. The bleached pulp production was 113,173 MT which is higher by 18.6 per cent over 2008-09. The focus was on maximizing pulp production to avoid any use of purchased pulp. The plant operations were fairly stable without any significant ups and downs on a month to month basis.
The initiative to contain the cost of energy continued in this year to ensure maximum use of hog in power boiler, which is the cheapest source of fuel. Inspite of prices of a few important inputs including MFO being higher in 2009-10, the total cost was lower by 17.40 per cent in 2009-10 as compared to 2008-09.
Though there were a few maintenance related issues such as While Liquor Clarifier Shell, Chem Prep FM21 Electrolyzer Cells, Paper Machine DCS, CTG Rotor, necessary actions have been taken either to procure spares or plan for their replacement. Repair and Maintenance expenses were kept under control with reduction in production consumables and salary and wages through manpower rationalization.
PULP BUS INESS
While many of the Company’s plants produce pulp, it is for internal use in the manufacturing of paper. The Company’s Kamalapuram Unit is the Company’s pulp manufacturing unit that caters to outside customers. This forms BILT’s stand-alone pulp business. The Unit primarily produces Rayon Grade Pulp for the viscose fibre industry. It also produces pulp for paper but that is mainly to balance lines and fully utilise capacities. Much of the paper grade pulp is internally used.
The economic slowdown of 2008 had an adverse effect on the global viscose
BALLARPUR INDUSTRIES L IMITED • ANNUAL REPORT 2009–1018
fibre industry. Consequently, in 2008-09, the Rayon Grade pulp business had been severely affected. In 2009-10, there has been a turn-around. With demand conditions improving in emerging economies and some degree of economic stabilisation across the globe, viscose fibre demand has picked up and consequently, there was an increase in Rayon Grade pulp off-take. This has helped grow revenues of BILT’s pulp business and re-establish its profitability.
Unit: KamalapuramDuring 2009-10, Unit Kamalapuram produced 85,345 MT of Rayon Grade pulp. To reduce costs, several initiatives were undertaken. These included:
Change in raw material furnish without
affecting quality of pulpImproved quality control system to reduce
off grade pulp generation Reduction in Fibre loss.
Optimisation of chemical consumption
Reduced consumption of coal in boilers
by using saw dust generated from chipper operations Measures taken to conserve water
and hence reduction in fresh water consumption from 129 m3/MT of pulp to 99 m3/MT of pulpProducer gas plant commissioned to
reduce furnace oil consumptionUse of non-conventional energy resources,
by using solar energy for water heating and street lightingIn addition, the Unit also undertook
some measures for system improvements. This included green belt development by plantation of Eucalyptus trees in an area of 300 acres and implementation of 5S initiatives
CertificationsUnit Kamalapuram was awarded ISO
9001, 14001 & OHSAS 18001 certification from DNV.
OFF ICE SUPPLY AND STAT IONERY
BUS INESS (OSSB )
Traditionally, BILT’s business has been production and distribution driven. As the Company evolved by introducing newer products and distribution channels, it had to move into more consumer centric businesses. The foray into the office supplies and stationery business was a step in this direction.
Although the business is different in nature, it leverages several strengths of the
Company in terms of its products, knowledge of supply chain and most importantly, the BILT brand value.
The paper based office supplies segment in India is estimated to have grown by 8 per cent to Rs.2,100 crore in 2009-10. While the market is fairly large in value terms, the segment is highly fragmented with many unorganised players. BILT believes that this segment has explosive growth potential—and as a market leader in the paper industry, it can take the leadership role in taking this segment to a new level. On one hand, there are immense growth possibilities; on the other, there is significant scope to improve profits through innovative value additions. In many ways, this business completes the paper value chain right from forest development to meeting customer needs. It is also an essential link to preserve and grow BILT’s market leadership in the paper industry. Thus, the Company continues to carefully position itself and develop this business.
This business has also built a sizeable product range in the Non-Paper segment through products like pencils, glue sticks, tapes, sticky notes and files and folders. The business uses its sales and distribution strengths to gain market share in these categories.
During 2009-10, BILT’s Office Supplies and Stationery Business grew by over 30 per cent taking the total turnover to Rs.244 crore. Today, the Company’s foray in consumer products has grown to 40,000 outlets across 300 locations in India.
There are three major brands in this segment:
Royal Executive Bond (REB): REB is for
quality bond paper used for desktop and letter head printing.REB is a market leader and controls more than 80 per cent market share in its segment.BILT Matrix: BILT Matrix notebooks
have now attained an iconic status in the stationery category and have become a benchmark for design and quality across all categories. BILT Ten On Ten: This brand focuses on
students. Introduced a couple of years ago, it has gained a sizeable market share and high brand saliency within its category. In this range, BILT markets various licensed products like MTV, NICK, DORA, SPONGEBOB KKR and CSK. During 2009-10, the Company’s business
products were promoted through a series of brand campaigns, road shows, customer contact programmes, direct mail marketing and outlet merchandising like shop-in-shop
MANAGEMENT D ISCUSSION & ANALYS IS 19
dispensers which exclusively displayed BILT products.
BILT launched 200 SKUs during 2009-10, taking the total to 1025 SKUs. It strengthened export operations and supplied a large portfolio of products to developed and developing markets. Several major global retailers across the world consider BILT as a key supply chain partner. The Company expects the turnover from the Office Supply and Stationery Business to increase to over Rs.300 crore in 2010-11.
RETA IL
BILT entered the Office Supply Retailing Business with the launch of its first store and the B2B business under the brand name ‘P3’ (Paper, Print and Pens) in June 2008. The P3 business retails a complete suite of office supplies vide its B2B & B2C platform.
The overall office supplies market (consumables) is estimated at Rs.18,000 crore. It is largely unorganised but with major international players entering the space, it is expected to soon have a fairly large organised segment.
BILT’s one stop paper and office supplies store – P3, answers all office needs ranging from stationery, technology, corporate gifting to print solutions. With a range of 16,000 SKU’s, the impressive P3 line of products and services would go a long way in establishing BILT as a pan India one stop solution for office supplies in the years to come.
Its footprint has expanded significantly on the B2C side and is present in Delhi-NCR, Mumbai, Pune and Bangalore with 11 stores in the second year of operation. On the B2B front, it services leading corporates and the total client list exceeds 500. The brand P3 lives up to the promise of the “Choice of the Professional” by providing the highest levels of customer service, satisfaction and enduring value.
This foray is backed up by a robust supply chain and IT backend wherein we engage the best third party logistics partners for catering to corporate supplies.
During 2009-10, the retail business grew by about 180 per cent taking the turnover to Rs.52 crore. The Company expects the turnover from retail business to double in 2010-11 with 17 stores across all major cities in India.
CAPAC ITY EXPANS ION
Much of the capacity expansion programmes initiated in the last few years came on-line in
2009-10 for the India operations, while at SFI, capacity expansion of pulp was launched.
Unit BhigwanTotal production from the newly commissioned paper line was 115,749 tonnes in 2009-10. This is a capacity utilisation of 88 per cent reflecting an effective production ramp up.
Unit BallarpurPaper from the new machine was reeled on 1 August 2009. Commercial production commenced from 1 December 2009 and the total production was 73,660 tonnes (including trial run production). This shows a 63 per cent capacity utilisation.
SFIThe expansion project was reconfigured to produce market pulp instead of increasing the paper capacity. Expected capacity increase is 120,000 ADT / annum of market pulp to cater to BHKP demand in Indian operations.
For this expansion, majority of equipment ordering has taken place and balance mechanical / electrical / automation contracts shall be awarded by September 2010. Civil work has commenced in all the areas and is progressing satisfactorily. New wood handling line shall be commissioned in September 2010.
The new Plant shall be commissioned progressively from May 2011. A shut down of fibre Line shall be undertaken in Quarter 3, 2011, after which the increased capacity shall be realised.
HUMAN RESOURCE
Human Resource (HR) management remains a focus area of BILT’s operations and HR continues to play the role of a strategic business partner in addition to being a change agent, employee champion, and administrative expert.
Talent attraction, particularly in technical areas, continues to be a challenge in the paper industry. There is also a scarcity of requisite talent in leadership roles. HR plays a pivotal role in addressing this concern at all management levels, through a well designed recruitment strategy. The talent pool is drawn from multiple source points such as Campus Recruitment, Employee Referrals, e-Recruitment and partnering with the right search and selection consultants. BILT repositioned its campus recruitment
The brand P3 lives up to the promise of the “Choice of the Professional” by providing the highest levels of customer service, satisfaction and enduring value.
BALLARPUR INDUSTRIES L IMITED • ANNUAL REPORT 2009–1020
programme and brought in quality resources - around 70 - from premier Management and Engineering Schools, so as to augment the young talent pool in the Company. In addition, the Company continues to get quality talent through lateral recruitment as per business needs.
Talent Management and Development are critical emphasis areas for the Company to promote employee engagement and satisfaction. Hence, BILT maintains its emphasis on recalibrating its HR systems and processes on a regular basis in order to build the right organisational climate for superior performance. The Company evolved structured job description at management levels for job clarity and role effectiveness. The Company’s goal setting exercise is well aligned to the Performance Management System. This helps realise the objective of performance gains, provision of reward and recognition for employees for achieving better results.
Competency assessment, career planning and potential realization are future areas to strengthen the foundation of employment contract. The Company is evaluating investments in the right technology in HR for better transaction management and deliveries to the employees.
Learning and development of employees is an important pillar for the organisation. The Company has a systematic focus on training and development and has evolved a comprehensive training policy and related systems to deliver this objective. It has a systematic focus through an in-house calendar based training to address knowledge, skills and competency of employees. It conducts several Management Development Programmes in technical, behavioural and managerial areas through partnerships with relevant trainers and reputed training institutes. In addition, employees are exposed to several ongoing projects, international assignments and opportunities to work at multi locations which encourage the overall development of employees and builds the talent pool for the future leadership positions.
Employee compensation, benefits and reward management are adequately dealt with for sustaining the motivation levels of employees. Compensation benchmarking and positioning is a continuous exercise for drawing inputs for delivering ‘Pay for Position’ focus. The Company has given reasonable reward increases and restructured compensation components for rationalization.
INFORMAT ION AND TECHNOLOGY
The Company completed the trials of Oracle Retail (Retek) — a frontline retail merchandising platform. After successful rollout of Oracle Retail in August 2009, the focus moved to stabilization of systems and providing near real time business intelligence for quicker and relevant decision making by operations team using QlikView, a tool used for BI and reporting.
The Company also completed implementation of ARIBA applications in August 2009. The implementation covers all aspects of the sourcing cycle of a supply chain, from request creation to contracts and its compliance to purchase orders. This was designed with complete commitment to cost effectiveness, ease-of-use and to enhance organisational productivity.
The Company began major upgradation exercise of its core ERP, Oracle eBiz. The implementation of the new version, R12 will create a base for future requirements and will enable the organization’s ERP system to be fully ready for the imminent requirements of IFRS compliance in 2011. The project is expected to be ready by December 2010.
FARM FORESTRY
BILT continues to work with the farming community for planting tree species that are suitable for industrial wood through its subsidiary, BILT Tree Tech Limited (BTTL). Thousands of growers are associated with BTTL’s farm forestry program for over a decade. BTTL has a strong network of qualified forestry staff to motivate the growers and provide service support at their doorstep.
BTTL is currently operating its farm forestry programme in the states of Orissa, Chhattisgarh, Andhra Pradesh and Maharashtra.
To strengthen the farm forestry program and increase its acceptability amongst farmers in the catchment areas of our mills, BTTL supplies fast growing, site specific quality planting stock with technical knowhow. For production of clonal saplings, we have environmentally controlled global standard nurseries in Maharashtra and Orissa, with a capacity to produce 10 million plants.
The Company also facilitates financial assistance for small and marginal farmers through bank loans to encourage them to take up plantations in their rain fed fallow lands. BILT also gives assured buy back of wood at
Regular training programmes are also conducted for the farmers to educate and update them on the techniques of raising pulpwood plantations to yield maximum productivity from their land.
MANAGEMENT D ISCUSSION & ANALYS IS 21
a declared support/ market price, whichever is higher.
The main objective of the BTTL farm forestry program is to grow wood on a sustainable basis in the catchment area of the paper mills. To achieve this and generate awareness amongst farmers, a series of exposure visits are conducted to the production nurseries and well established plantations. Regular training programmes are also conducted for the farmers to educate and update them on the techniques of raising pulpwood plantations to yield maximum productivity from their land.
RESEARCH AND DEVELOPMENT
In 2009-10, the following projects were carried out at Thapar Centre for Industrial Research & Development, sponsored by the Company:
Improvement in pulp yield
Improvement in final bleached pulp
brightness and whitenessCritical evaluation of raw material storage,
practice, and study on changes of moisture and cellulose component in wood and bamboo during storageIncrease of ash in paper without adversely
affecting the physical, optical and surface properties while meeting functionality requirementEstimation of bound & unbound ASA in
alkaline ASA sized papersControl of bulking sludge in aerobic
biological treatment in pulp and paper industryOptimization of ingredients for topcoat
coating formulation De-colourisation of phosphoric acid by
ozonation
F INANC IAL REV IEW
Table 1 gives the abridged profit and loss statement for BILT as a consolidated entity.
The salient features of the financial performance in 2009-10 are:
Net Sales increased by 34 per cent to
Rs.3,794.6 crore in 2009-10With margins under pressure, volume
growth helped Profit before interest, depreciation and tax (PBDIT) grew by almost 25 per cent to Rs.818.4 crore in 2009-10With significant expansions coming on
stream, both depreciation and interest increased during 2009-10. While depreciation increased from Rs.232.6 crore in 2008-09 to Rs.301.9 crore in 2009-10, finance charges (mainly interest) increased from Rs.170.8 crore in 2008-09 to Rs.237.1 crore in 2009-10.Consequently, Profit after tax (PAT-after
minority interest and share in associate companies) increased by 17 per cent to Rs.197 crore.
INTERNAL CONTROLS AND THE IR
ADEQUACY
BILT has a proper and adequate system of internal controls to ensure that all assets are safeguarded and protected against loss from unauthorised use or disposition, and to ensure that all transactions are authorised, recorded and reported correctly and adequately. The Company’s internal controls are supplemented by an extensive programme of internal audits, review by management and documented policies, guidelines and procedures. The internal control is designed to ensure that financial and other records are reliable for preparing
TABLE 1 • ABR IDGED PROF IT AND LOSS STATEMENT OFB ILT CONSOL IDATED
RS. CRORE
2009-10 2008-09
Net Sales 3794.6 2824.7
Other Income 23.9 13.2
Total Revenue 3818.5 2837.9
PBDIT 818.4 655.8
Depreciation 301.9 232.6
PBIT 516.5 423.2
Interest & Finance Charges (Net) 237.1 170.8
PBT 279.4 252.4
Tax 38.9 64.5
PAT 240.5 187.9
PAT(after minority interest and associate company profits) 197.0 168.3
BALLARPUR INDUSTRIES L IMITED • ANNUAL REPORT 2009–1022
financial information and for maintaining accountability of assets. In an IT driven networked environment, validation of ERP implementation and IT security continues to receive focused attention from the internal audit team at BILT. The internal audit function consists of professionally qualified chartered accountants, certified information system auditors, certified fraud examiners and certified internal auditors. All financial and operational internal control systems are vetted by the Board of Directors and its Audit Committee.
The Company’s internal audit department conforms to ISO 9001:2008 certification. It is the first internal audit department in India assessed to conform to international standards and code of ethics by the Institute of Internal Auditors (IIA), USA. Risk assessment study of all operations across all the units has been conducted by the internal audit department during 2008. Annual risk based audit plans are in place for all units, corporate and regional offices. All cash, bank payments and major contracts are pre-audited. These in turn are complemented by a process and transaction review at all existing facilities of the Company and the corporate office. Various processes like raw material procurement, quality assurance, general procurement, inventory management, overtime, contracts, operations review, production planning, wastages, exports, imports, engineering and utilities are reviewed on a consistent basis over a 3 year cycle. Regional sales offices are audited every year. Annual audit plans are prepared in the beginning of the year enumerating areas to be covered and the timing thereof.
RISKS AND CONCERNS
Apart from the regular business risks inherent in any business, there are some risks specific to the paper industry. First, in developed countries, with the penetration of the internet for many end usages, paper is getting substituted. While such economic maturities will not be seen in BILT’s primary markets of India and South East Asia in the near future, such technology based interventions remain a risk.
Second, paper production at BILT still is wood based. With forest depletion and restrictions, there is always the risk of unavailability of the right raw materials given the growth plans of the Company. BILT has been continuously hedging against this risk with its initiatives in farm forestry and development of alternate sources.
Third, India has also witnessed large levels of capacity expansion across all paper segments but mainly uncoated woodfree. There will be intense competition to penetrate markets with products from the newly installed capacities. Thus, there is an increasing risk of having to face market pressures in an industry characterised by over supply. BILT has been proactively pre- empting this risk and its businesses strategy is geared to overcome this challenge.
CAUT IONARY STATEMENT
Statements in this management discussion and analysis describing the Company’s objectives, projections, estimates and expectations may be ‘forward looking statements’ within the meaning of applicable laws and regulations. Actual results may differ substantially or materially from those expressed or implied. Important developments that could affect the Company’s operations include a downward trend in the paper industry, rise in input costs, exchange rate fluctuations, and significant changes in the political and economic environment in India, environment standards, tax laws, litigation and labour relations.
For and on behalf of the Board of Directors
G A U TA M T H A PA R
Chairman
R . R . V E D E R A H
Managing Director
B . H A R I H A R A N
Group Director (Finance)
Date 19 August 2010Place New Delhi
23
corporate social responsibility
BALLARPUR INDUSTRIES L IMITED • ANNUAL REPORT 2009–1024
BILT has always focused on delivering value to all its stakeholders and strived to be a marquee corporate citizen. A key element of this endeavour is the Company’s structured corporate social responsibility (CSR) programme, which is intrinsic to its business strategy.
As the Indian economy grows rapidly, the critical challenge is to create inclusive development. To meet this challenge, it is very important to provide equal opportunities to all the country’s citizens. As stakeholders in the economic prosperity of the country, the Indian corporate sector has to play a vital role in this very crucial task. In this light, BILT has focused on ‘affirmative action’ as a key element of its CSR programme.
‘Affirmative action’ is about giving everybody the equal opportunity to achieve their potential without any discrimination. BILT’s operations are located in remote and backward areas of the country where access to resources is very limited. Most people in the community around these operations come from marginalised backgrounds – a large number of whom belong to Schedule Castes and Tribes. As the Company’s CSR activities are largely focused on these communities, there is considerable scope of ‘affirmative action’. The CSR interventions have been undertaken through a systematic approach of:
organising communities
assistance in capacity building
undertaking concrete programmes to
convert the capacities into action
ORGANIS ING COMMUNIT IES
BILT recognises that the empowerment based model of development needs strong community institutions to sustain the initiatives. Keeping this in view, Self Help Groups (SHGs) of women belonging to the underprivileged sections of society both in the rural areas as well as slum pockets in the urban areas have formed the base of all the Company’s CSR activities. So far, 622 SHGs have been created, which have worked directly with more than 9,500 women.
Adolescents, especially girls, are an important group as they are the country’s future generation. BILT has always been working with the youth since the inception of its structured CSR programme. More than 100 youth groups have been engaged in the process. Table 1 gives the statistics of community based organisations and their composition.
ASS ISTANCE IN CAPAC ITY
BU ILD ING
BILT conducted a series of training and capacity building programmes to enable these community based organisations (CBOs) to take up a larger role. These include vocational training and entrepreneurship training on various skills. Training to the youth included skills related to motor driving, electrical repair, motor winding, screen printing and plumbing. These trained youth have secured gainful employment and are earning incomes ranging from Rs. 1,500 per month to Rs. 7,500 per month. Rural girls have undergone full time training on tailoring and embroidery (both hand and machine). This enabled them to supplement their family incomes.
Employability Training for youth:BILT conducted employability training to the urban youth in the new emerging sectors of the economy. Specifically, training was provided to more than 600 educated youth in the areas of retail marketing in BPO sector, customer relations service in the retail marketing sector and hospitality management in the service sector industries. The employability training programme called ‘Ek Mouka’ for the unemployed SC and ST youth was undertaken through 2009-10.
Farmers’ Training and Demonstration on Best Agricultural Practices:Most of the areas where BILT is working follow traditional agricultural practices. To bring a positive change in socio-economic conditions of the rural population it is important to expose farmers to improved agricultural practices. BILT provided these farmers with
TABLE 01 • COMMUNITY BASED ORGANISAT IONS FORMED IN 2009 -10
Type of Groups Total Members STs SCs OBCs General
Self Help Groups of Women 1581 429 (27%) 692 (43%) 385 (24%) 155 (10%)
Adolescent Girls 3143 1076 (34%) 1219 (39%) 706 (22%) 164 (5%)
Youth Groups 335 102 (30%) 103 (31%) 107 (32%) 23 (7%)
Farmers Groups 1170 335 (28%) 20 (2%) 615 (53 %) 200 (17 %)
CORPORATE SOCIAL RESPONSIB IL ITY 25
training on improved agricultural practices through exposure visits, demonstration plots, classroom/ field trainings on crop/ variety selection, crop rotation, agronomic practices (fertilizer, pesticide, irrigation, inter-cultural operations), kitchen gardening, mushroom cultivation, fruit and vegetable crop cultivation, fodder cultivation and organic farming (vermi-composting, cow urine application, etc). A total of 1,686 farmers have been trained and provided inputs in improved agricultural practices.
Table 2 gives details of the youth and farmer training programmes.
PROGRAMMES
Gender Equity and Affirmative Action:Women are an integral part of the rural economy and need to be empowered to develop their full potential. BILT worked very closely with women to enable them to earn
income from both farm based and off-farm economic activities. Micro finance was made available to them through SHGs that helped assure alternative sources of income to the women both in the rural and urban areas. Today, more than 700 women are earning a regular income ranging from Rs. 1,200 per month to Rs.3,500 per month from these activities. During 2009-10, more than 300 women started new economic enterprises.
Pulpwood Plantation with Marginal and Small Farmers for sustainable income:BILT took up specific engagement plans with the marginal and small farmers to link the community to the supply chain of the Company. Through this specific intervention, the Company has helped develop long-term viable economic venture for the farmers that assures them of sustainable income. Collaboration with NABARD for loans to these farmers without any collateral has ensured the sustainability of the project. Through this
TABLE 03 • DETA ILS OF FARMER INTERVENT ION FOR PULPWOOD PLANTAT ION
Intervention Total Farmers Covered STs SCs OBCs General
Pulpwood Plantation with Marginal & Small Farmers 496 368 (74%) 58 (12%) 39 (8%) 31 (6%)
TABLE 04 • RURAL EDUCAT ION COVERAGE
Intervention Total Children Covered STs SCs OBCs General
Community Classes 14549 2674 (18%) 4355 (30%) 5223 (36%) 2297 (16%)
Community Library 39990 7998 (20%) 10395 (26%) 15152 (38%) 6445 (16)
TABLE 02 • DETA ILS OF YOUTH AND FARMER TRA IN ING
Members Trained Total STs SCs OBCs General
Youth 440 39 (9%) 213 (48%) 150 (34%) 38 (9%)
Farmers 1686 337 (20%) 170 (10%) 505 (30%) 674 (40%)
Women Members of Ashti Women’s Credit Co-operative Society Undergoing training
Pulpwood Plantation (Planted in 2009) with Marginal Farmers through Nabard Collaboration
Pulpwood Plantation (Planted in 2006, Nearing harvest) on degraded land at Unit Jeypore Orissa
BALLARPUR INDUSTRIES L IMITED • ANNUAL REPORT 2009–1026
initiative, BILT has promoted agro forestry based pulpwood plantation on degraded land. Nearly 500 farmers have participated in this covering more than 950 Acres of land. The details of the coverage of this project is given in table 3.
Agricultural Improvement Initiative:Based on the capacity building trainings provided, the farmers have started realising the impact of implementing newer techniques of farming through higher yields and incomes. BILT has further supported this initiative by providing market accessibility
and linkage for the farmers’ produce so that they can get a fair price. This end-to-end programme has helped generate 25 per cent more yield per acre and better prices for the agriculture produces, resulting in around 30 per cent income growth.
Scaling up other Small and Micro Enterprises:The training and capacity building initiatives followed by networking support with various other agencies have enabled scaling up of SMEs. During 2009-10, fourteen new SMEs were created taking the total number of operational SMEs to 228. This has resulted in a significant increase in the income of these entrepreneurs from almost nil to about Rs. 3,500 a month.
SUPPORT ACT IV I T IES
EDUCAT ION IN IT IAT I VES
Affirmative Action with Rural Children for Education:BILT has been working very closely with the local communities, partner NGOs and the Government Education Department for augmenting the quality and reach of education, especially in rural areas and slum pockets. There are community based education centres, which focus on enhancing the reach, quality and ownership of the initiative by the community. Through this, quality education has been provided and more than 1000 children who would have otherwise dropped out have been mainstreamed into formal system. Table 4 gives the details of the coverage.
Mobile Computer Education Programme:Computer literacy campaign though mobile computer labs is an innovative way of reaching the remotest area, without having to worry about issues like electric supply and availability of qualified teachers. This campaign reached out to more than 40 government schools with buses that are fitted
Best Agriculture Practices: A farmer showing his field where he has adopted Maize cultivation
Best Agriculture Practices: Vermin Composting serves as a dual objective intervention on organic farming as well as income enhancement measure
Dairy Development, An off-farm micro enterprise enabling farmers to earn sustainable incomes
TABLE 05 • MOB ILE EDUCAT ION CAMPA IGN COVERAGE
STs SCs OBCs General Total
Children Covered through Mobile Computer Education Initiative 413 (13%) 1848 (57%) 675 (21%) 1180 (36%) 3240
Girl Children covered through Mobile Computer Education Initiative 197 (13%) 539 (35%) 610 (40%) 172 (11%) 1518
TABLE 06 • HEATH CARE COVERAGE
STs SCs OBCs General Total
Children Covered through Immunization 13852 (39%) 13142 (37%) 6393 (18%) 2131 (6%) 35518
Expectant & Lactating Mothers Covered through RCH Initiatives 1510 (35%) 1726 (40%) 1294 (30%) 216 (5%) 4314
CORPORATE SOCIAL RESPONSIB IL ITY 27
with computers. The initiative has helped in arresting the dropout rates after 5th grade. Table 5 gives the coverage of this programme.
HEALTH IN IT IAT I VES
104 community health workers have been trained to identify and treat early signs of high risk pregnancies, neonatal morbidity, and provide health education on various issues. The coverage of this programme is given in table 6.
Innovation in Care and Support of people living with HIV:BILT runs two Antiretroviral Therapy (ART) centres at Ballarpur and Koraput. These centres were started under Public Private Partnership model where BILT is partnering with National AIDS Control Organization (NACO), New Delhi and technical support is provided by CII, New Delhi. In 2009-10 the centres registered 661 patients of which 377 are on antiretroviral treatment.
In order to improve overall quality of life for people living with HIV/AIDS (PLHA) and their dependents, a new community based initiative - “Continuum of Care” (CoC) - at ART centres were started from 1 June 2009 at Ballarpur and from 1 Feb 2010 at Koraput. The main objective of the project is to provide integrated package of support services to people living with HIV/AIDS (PLHA) and their families who are registered with these ART centres. The project is funded by the International Finance Corporation (IFC).
The project started with 150 patients from a neghbouring radius of 5 km. The implementation partner NGOs are South Orissa Voluntary Action (SOVA) and Bharatiya Adim Jati Sevak Sangha (BAJSS) in Koraput
and Ballarpur respectively. Family Health India (FHI) provides technical support with regards to M & E and baseline data collection.In 2009-10, the project could achieve the following:
Formed 3 Self help groups of PLHA, this
helps in taking up loans from the group in case of emergency like hospitalization etc.One group started income generation
activity of making paper envelops from newspaper which are supplied to the company canteen and cooperative store.10 PLHA members trained on screen
printing, and provided loans to start their business.Provided loans to start income generation
activities like vegetable shop, daily needs store etc to women.Seeds and plants have been provided
to 50 families to start kitchen gardens to find a long term solution to anaemia and malnourishment esp. among women and children (Certain type of ART drugs may lead to anaemic conditions, eating of green leafy vegetables in the diet can help in improve this condition.)With the intent of improving the reach
beyond 5 kms and to create sustainable solutions for the care and management of PLHA and the sustainability of the inputs provided the concept of ‘Buddy’ support was developed. The ‘Buddy’ is any person with whom the PLHA has a close relationship and can be trained to provide the necessary support to the PLHA both moral and social and adherence & follow up related. The selected buddies have been provided with a training to help build their capacities in care and support.
Mobile Computer Education Programme for underprivileged children of Government Schools
Mobile Computer Education Programme for underprivileged children of Government Schools
Enabling Education for Girl Child
BALLARPUR INDUSTRIES L IMITED • ANNUAL REPORT 2009–1028
OUTCOMES OF THE PROJECT
Marked improvement in the patients’ a. health after they enrolled at our centre. This was indicated through consistent weight gain and very few patients remaining away from the work due to ill health. Steady increase in CD4 count (marker b. indicator) of the patients by an average of 15 per cent has been documented in past nine months. This cannot happen only because of drugs but continuous counselling, home visits to PLHAs that has increased their overall well being.
More than 70 per cent PLHA’s have c. disclosed their HIV positive status to family members. This has helped in reducing the stigma attached with the disease.If the patients are provided with d. adherence counselling and are told about side effects of the drugs the adherence to drugs is found better. Majority of our patient’s adherence is more than 95 per cent, which is higher than national average. Haemoglobin (Hb) percentage has e. increased by 3.3 per cent making them healthier.
Mass Awareness programme on HIV/AIDS with the communities through Street Plays
Enabling reach of health care services in remote areas for the underprivileged communities
Mass Awareness programme on HIV/AIDS with the communities
29
corporate governance
BALLARPUR INDUSTRIES L IMITED • ANNUAL REPORT 2009–1030
THE COMPANY ’S PH ILOSOPHY ON
CORPORATE GOVERNANCE
Ballarpur Industries Limited (‘the Company’ or ‘BILT’) continuously strives to attain higher levels of accountability, transparency, responsibility and fairness in all aspects of its operations. Its business culture and practices are founded upon a common set of strong ethical values and these govern the Company’s relationships with customers, employees, shareholders, suppliers, regulatory authorities and the communities that it operates in.
BILT is led by a strong and independent Board of Directors providing the Company strong oversight and strategic counsel. The Company has well established systems and procedures to ensure that the Board remains well-informed and well-equipped to fulfil its governance responsibilities and provide management with the strategic direction required to create long-term shareholder value.
The corporate secretarial department and the internal audit function of the Company are ISO 9001:2008 certified and remain committed to adopting best-in-class corporate governance practices and internal controls. In 2009-10, as BILT continued to deploy competitive corporate strategies, it remained focussed on regular monitoring of strategic issues and risk management which included both evaluation and mitigation.
In India, corporate governance standards for listed companies are regulated by the
Securities and Exchange Board of India (SEBI) through Clause 49 of the Listing Agreement with the Stock Exchanges. BILT remains committed to maintaining strict compliance with the letter and spirit of Clause 49.
This chapter, along with the chapters on Management Discussion and Analysis and Additional Shareholders’ Information, reports BILT’s compliance with Clause 49.
BOARD OF D IRECTORS
COMPOS IT ION
As on 30 June 2010, the Company had a nine member Board of Directors. The Chairman, Mr. Gautam Thapar is a non Executive and Promoter Director. The Company has two Executive Directors - Mr. R. R. Vederah (Managing Director) and Mr. B. Hariharan (Group Director-Finance). The six Non-Executive, Independent Directors are Mr. Sanjay Labroo, Mr. R. K. Ahooja, Mr. A. S. Dulat, Dr. Pramath Raj Sinha, Mr. Ashish Guha and Mr. A.P. Singh {Nominee Director of the Life Insurance Corporation of India (LIC)}.
The Directors are eminent personalities and experienced professionals in business, law, finance and corporate management.
Mr. Shardul S. Shroff resigned from the Board of Directors with effect from 20 April 2010. The composition of the Board of the Company is in conformity with Clause 49
of the Listing Agreement. Table 1 gives the details of the Directors on the Board.
BOARD MEET INGS
There were seven Board Meetings held in the financial year 2009–10: 1 July 2009, 21 September 2009, 30 October 2009, 17 December 2009, 29 January 2010, 22 February 2010 and 20 April 2010. The Board of Directors of the Company is provided with all the statutory and other significant and material information to enable it to discharge its responsibilities as trustees of the Shareholders.
Table 1 gives the details of Directors attendance at the Board Meetings and Annual General Meeting held during the year, the number of Directorships and Committee Chairmanships / Memberships held by them in other public limited companies. Other directorships do not include alternate directorship, directorship of private limited companies, Section 25 companies and companies incorporated outside India.
DIRECTORS ’ COMPENSAT ION
The Directors are paid compensation, as approved by the Board and Shareholders within the ceilings prescribed under the Companies Act, 1956.
The Executive Directors of the Company are paid salary, perquisites, performance linked incentive/commission and other retiral benefits. The Non- Executive Directors are paid sitting fees for attending meetings of the Board & its Committees and commission. In
TABLE 1 • DETA ILS OF THE BOARD
name of the directors designation category attendance particulars no. of directorships and committee memberships/ chairmanships in other public
limited companies***
number of board meetings under tenure
committee
held attended last agm# directorships memberships chairmanships
Mr. Gautam Thapar* Chairman Non Executive, Promoter 7 7 No 12 5 2
Mr. R. R. Vederah Managing Director Executive 7 7 No 5 3 -
Mr. B. Hariharan Group Director (Finance) Executive 7 7 Yes 9 7 4
Mr. Shardul S. Shroff** Director Independent 6 1 No 4 3 -
Mr. Sanjay Labroo Director Independent 7 6 No 10 3 -
Mr. R.K. Ahooja Director Independent 7 7 Yes 1 - -
Mr. A. S. Dulat Director Independent 7 7 Yes 1 - -
Mr. A. P. Singh (LIC nominee) Independent 7 7 Yes - - -
Mr. Ashish Guha Director Independent 7 6 No 3 3 -
Dr. Pramath Raj Sinha Director Independent 7 3 No - - -
* Relinquished office of Executive Chairman w.e.f. 1 April 2010 and re-designated as Non Executive Chairman with effect from that date.** Resigned w.e.f. 20 April 2010.***Committees included are Audit and Investors’/ Shareholders’ Grievance Committee# Annual General Meeting held on 18 December 2009.
addition, the Chairmen of Audit Committee and Investors’/Shareholders’ Grievance Committee are paid a variable component, over and above the aforesaid normal commission, for their guidance, expertise and valuable contribution.
The Shareholders, at the 64th Annual General Meeting held on 18 December 2009, approved payment of remuneration by way of sitting fee, commission or otherwise to Company’s Non-Executive Directors (including Independent Directors), collectively, not exceeding 1 per cent of the net profits of the Company.
The compensation paid to the Directors for the financial year 2009-10 is given in Table 2.
NON-EXECUT IVE D IRECTORS ’
SHAREHOLD ING
As on 30 June 2010, Mr. Gautam Thapar held 11,61,216 Equity Shares, Mr. Sanjay Labroo held 4,95,802 Equity Shares and Mr. A. S. Dulat held 3,000 Equity Shares in the Company.
The Company has not issued any convertible instrument to any Non-Executive Director.
CODE OF CONDUCT
The Company has a Code of Conduct for its Directors and designated senior management personnel. The Code of Conduct is available on the website of the Company (www.bilt.com). All Board members and designated senior management personnel have affirmed compliance with the Code of Conduct for the financial year 2009-10. A declaration signed
by the Managing Director to this effect is annexed to this Report.
COMMITTEES OF THE BOARD
The details of the composition of BILT’s Audit Committee, Remuneration Committee, Investors’ / Shareholders’ Grievance Committee and Risk Management Committee as on 30 June 2010 are given in Table 3. Apart from the above, BILT also has other Board level committees to manage the day to day decisions pertaining to operations / business of the Company.
All decisions pertaining to the mandate of these Committees and appointment of members are taken by the Board of Directors.
AUD IT COMMITTEE
The Audit Committee comprises four Independent Directors and one Executive Director. The Chairman of the Audit Committee is an Independent Director. During the year, the Committee met seven times: 3 September 2009, 21 September 2009, 30 October 2009, 16 December 2009, 29 January 2010, 30 March 2010 and 20 April 2010. The attendance record is given in Table 4.
All members of the Audit Committee have accounting and financial management expertise. The Committee acts as a link between the Management, Auditors and the Board of Directors of the Company and has full access to financial information. The Company Secretary of the Company
acted as the Secretary to the Committee. The Managing Director, Chief Operating Officer, Chief Financial Officer, head of internal audit, other relevant officials and the representatives of the statutory auditors and cost auditors attend the meetings as invitees, whenever required.
In addition to review of the financial results of the Company, update on internal audits of various functions, review of internal control systems and risk assessment, applicability and compliance of various laws, reappointment and remuneration of statutory auditors, cost accounting systems and cost audit reports also features on the Audit Committee’s Agenda.
REMUNERAT ION COMMITTEE
The Remuneration Committee comprises Mr. A. P. Singh, Chairman, Mr. Gautam Thapar and Mr. Ashish Guha, as its members.
The Committee determines the Company’s policy on all elements of the remuneration payable to Executive Directors. The remuneration policy of the Company is aimed at rewarding performance based on periodic review of achievements.
RISK MANAGEMENT COMMITTEE
The Risk Management Committee of the Company comprises four Directors i.e. Mr. R. R. Vederah as Chairman, Mr. B. Hariharan, Mr. A. S. Dulat and Mr. Ashish Guha, as its members.
The Board had constituted the Committee to understand and assess various kinds of risks associated with the running of business
31CORPORATE GOVERNANCE
TABLE 2 • DETAILS OF REMUNERATION PAID TO DIRECTORS
AMOUNT IN RS .
name of the directors salary and perquisites
performance linked incentive
provident fund and superannuation fund
commission payable
sitting fees total
Mr. Gautam Thapar 10665031 - 1458000 18738000 40000 30901031
Mr. R.R. Vederah 21943561 11250000 1125000 - - 34318561
Mr. B. Hariharan 21858498 9900000 2227500 - - 33985998
Mr. Shardul S. Shroff* - - - 320879 20000 340879
Mr. Sanjay Labroo - - - 400000 120000 520000
Mr. R.K. Ahooja - - - 600000 280000 880000
Mr. A.S. Dulat - - 600000 300000 900000
Dr. Pramath Raj Sinha - - - 400000 160000 560000
Mr. Ashish Guha - - - 400000 120000 500000
Mr. A.P. Singh** - - - 400000 280000 680000
Total 54467090 21150000 4810500 21858879 1320000 103586469
# Salary, perquisites, provident fund and superannuation fund paid upto 31 March 2010.@ Commission payable as Executive Chairman upto 31 March 2010 and subsequently as non Executive Chairman w.e.f. 1 April 2010.© Paid for attending meetings held after 1 April 2010.* Resigned w.e.f. 20 April 2010.** Sitting fees and commission shall be paid to LIC, as per terms of appointment.
# # @ ©
BALLARPUR INDUSTRIES L IMITED • ANNUAL REPORT 2009–1032
and suggesting/ implementing ways and means for eliminating/minimising risks to the business of the Company and periodic review of the management control procedures/ tools used to mitigate such risks.
INVESTORS ’ / SHAREHOLDERS ’
GR IEVANCE COMMITTEE
The Company has an Investors’/ Shareholders’ Grievance Committee, details of which are given under the section ‘Shareholders’ in this chapter.
MANAGEMENT
MANAGEMENT D ISCUSS ION AND
ANALYS IS REPORT
This is given as a separate chapter in the Annual Report.
DISCLOSURES OF MATER IAL
TRANSACT IONS
A disclosure of all related party transactions has been made in the notes to the accounts of the balance sheet presented in this Annual Report. All the Directors have disclosed their interest in Form No. 24AA pursuant to Section 299 of the Companies Act, 1956 and changes are placed before the Board at its meetings.
ACCOUNT ING POL IC IES
The Company has adopted accounting treatments, which are in conformance with those prescribed by the Accounting Standards.
INS IDER TRAD ING
In compliance with the SEBI regulations on prevention of insider trading, the Company has a Code on Insider Trading for its Directors, Management and designated Executives. The Code lays down guidelines, which advise them on procedures to be followed and disclosures to be made, while dealing in securities of the Company.
SHAREHOLDERS
DISCLOSURE REGARD ING RE -
APPO INTMENT OF D IRECTORS
Mr. Gautam Thapar and Mr. Sanjay Labroo, retire at the forthcoming Annual General Meeting and being eligible, seek re-election. Their brief profiles are as hereunder and other directorships are given in Table 5.
Mr. Gautam ThaparMr. Gautam Thapar is the Chairman & CEO of one of India’s foremost diversified Groups – Avantha. The Group’s revenues are in excess of USD 3 billion with operations in eight countries and employing over 20,000 people.
The Avantha Group encompasses companies in diversified sectors like power transmission and distribution equipments, pulp and paper, horticulture and food processing, farm forestry, chemicals, infrastructure and information technology.
Crompton Greaves Limited is the other listed company in the Avantha Group of which Mr. Thapar is Non Executive Chairman.
An alumnus of the prestigious Doon School, Mr. Thapar completed his Chemical Engineering from Pratt Institute, USA and has over 22 years of rich and varied industrial experience.
Mr. Thapar currently serves on the Board of various Industry Associations and Professional Organisations.
Mr. Sanjay LabrooMr. Sanjay Labroo holds a dual Degree in Finance and Management from Wharton Business School, USA. Mr. Labroo is the founding Managing Director & CEO of Asahi India Glass Limited (AIS).
As the founding Managing Director & CEO of AIS, Mr. Labroo has been instrumental in transforming AIS from being a supplier of one product, automotive tempered glass, to one customer, Maruti Udyog (Suzuki), when it started in 1987, to its current position of India’s largest integrated glass company.
Mr. Labroo is a Director on the Boards of various other companies. He is also a Director
TABLE 4 • ATTENDANCE RECORD OF THE AUDIT COMMITTEE
name of members designation no. of meetings under tenure
held attended
Mr. R.K. Ahooja Chairman 7 7
Dr. Pramath Raj Sinha Member 7 5
Mr. B. Hariharan Member 7 7
Mr. A. S. Dulat Member 7 7
Mr. A. P. Singh Member 7 7
TABLE 3 • COMPOSITION OF BOARD-LEVEL COMMITTEES
name of the directors category audit investors’/ shareholders’ grievance remuneration risk management committee
Mr. Gautam Thapar Non Executive# — Member Member —
Mr. R. R. Vederah Executive — — — Chairman
Mr. B. Hariharan Executive Member Member — Member
Mr. Sanjay Labroo Independent — — — —
Mr. R.K. Ahooja Independent Chairman — — —
Dr. Pramath Raj Sinha Independent Member — — —
Mr. A. S. Dulat Independent Member Chairman — Member
Mr. Ashish Guha Independent — — Member Member
Mr. A.P. Singh Independent Member — Chairman —
# Relinquished office of Executive Chairman w.e.f. 1 April 2010 and re-designated as Non Executive Chairman with effect from that date.
33CORPORATE GOVERNANCE
on the Central Board of the Reserve Bank of India and a Member of the Managing Committee of the Indian Glass Manufacturers Association. Mr. Labroo is also associated with various other Trade Organisations and Chambers of Commerce.
COMMUNICAT ION TO
SHAREHOLDERS
Full and complete disclosure of information regarding the Company’s financial situation and performance is an important part of the Company’s Corporate Governance ethics. The Company has demonstrated this commitment by sending its shareholders a full version of its Annual Report, despite there being a regulatory exemption.
The financial results of the Company are usually published in the Times of India (Delhi edition), The Economic Times (All editions), Navbharat Times (Delhi and Mumbai
editions), Financial Times (Delhi edition), The Hitavada (Nagpur: English edition) and Lokmat (Nagpur: English, Hindi and Marathi editions) and are simultaneously uploaded on the Company’s website (www.bilt.com). The Company also sends the results and announcements to the Luxembourg Stock Exchange and Singapore Stock Exchange for the benefit of the GDS and ZCCB holders, respectively.
The amended Clause 41 of the Listing Agreement requires a Company to only publish standalone financial results and gave an option to a company, having subsidiaries, not to publish, but to only submit consolidated results to Stock Exchanges. However, despite this Regulatory exemption, the Company has continued its practice of publishing quarterly as well as year to date financial results, both consolidated and
standalone, in the newspaper for better disclosures to its shareholders.
Financial results, as published in the newspapers are available to the members on request.
GENERAL BODY MEET INGS
Table 6 gives the details of General Meetings, held in the last three years.
The following Special Resolutions were taken up in the previous General Meetings and approved by Shareholders with requisite majority:
2007 (EGM)Court convened meeting approving the Scheme of Arrangement and Reorganisation between the Company and BILT Graphic Paper Products Limited.
TABLE 5 • DETAILS OF OTHER DIRECTORSHIPS AND MEMBERSHIPS OF COMMITTEES OF BOARDS
name of the director directorship in other public limited companies committee membership/ chairmanship
audit committee investors’/ shareholders’ grievance
Mr. Gautam Thapar Asahi India Glass Limited Member –
Crompton Greaves Limited Member Chairman
Salient Business Solutions Limited – –
Solaris Holdings Limited – –
Avantha Holdings Limited – –
Avantha Realty Limited – –
Bilt Paper Holdings Limited Chairman –
CG Capital & Investments Limited Member –
Global Green Company Limited – –
KCT Papers Limited – –
Lavasa Corporation Limited – –
Karam Chand Thapar & Bros. Limited – –
Mr. Sanjay Labroo Asahi India Glass Limited – Member
AIS Adhesives Limited – –
AIS Glass Solutions Limited – –
Asahi India Map Auto Glass Limited – –
Crompton Greaves Limited Member –
Krishna Maruti Limited – –
Maltex Masters Limited – –
Mahindra First Choice Wheels Limited Member –
Sheild Autoglass Limited – –
SKH Metals Limited – –
TABLE 6 • DETAILS OF GENERAL MEETINGS HELD DURING LAST THREE YEARS
year category* location of the meeting date time
2007 EGM P.O. Ballarpur Paper Mills – 442901, Distt. Chandrapur, Maharashtra 19 October 2007 11.30 a.m.
2007 AGM P.O. Ballarpur Paper Mills – 442901, Distt. Chandrapur, Maharashtra 4 December 2007 12.00 Noon
2008 AGM P.O. Ballarpur Paper Mills – 442901, Distt. Chandrapur, Maharashtra 2 December 2008 12.00 Noon
2009 AGM P.O. Ballarpur Paper Mills – 442901, Distt. Chandrapur, Maharashtra 18 December 2009 12.00 Noon
2010 EGM P.O. Ballarpur Paper Mills – 442901, Distt. Chandrapur, Maharashtra 3 March 2010 12.00 Noon
*AGM - Annual General Meeting, EGM - Extraordinary General Meeting
BALLARPUR INDUSTRIES L IMITED • ANNUAL REPORT 2009–1034
2007 (AGM) Payment of remuneration to Non-Executive Directors by way of commission and/or otherwise.
2008 (AGM)Payment of remuneration to Non-Executive Directors by way of commission and/or otherwise.
2009 (AGM)Payment of remuneration to Non-Executive Directors by way of commission and/or otherwise.
2010 (EGM)Issuance of securities on preferential basis to promoter of the Company, Bilt Paper Holdings Limited.
CAP ITAL MARKET COMPL IANCE
The Company has complied with all requirements of the Listing Agreement with Stock Exchanges as well as the regulations and guidelines prescribed by SEBI. There were no penalties or strictures imposed on the Company by any statutory authorities for non compliance on any matter related to capital markets, during the last three years.
INVESTORS ’ / SHAREHOLDERS ’
GR IEVANCE COMMITTEE
The Investors’/ Shareholders’ Grievance Committee comprises Mr. A. S. Dulat as Chairman, Mr. Gautam Thapar and Mr. B. Hariharan as its members, details of which are given under the section ‘Shareholders’ in this chapter.
During the year, a meeting was held on 11 June 2010 and was attended by all the members.
During the financial year ended 30 June 2010, 9 complaints were received from the Investors/ shareholders and all of them were redressed.
UNCLA IMED SHARES
Pursuant to an amendment to the Listing Agreement with Stock Exchanges, a listed company needs to transfer shares, which have remained unclaimed pursuant to a public issue or any other issue, to a demat suspense account with a Depository Participant. The Company is in the process of assessing the details of the shareholders, whose shares are still unclaimed, pursuant to its earlier public issues, amalgamations, rights issue and sub-division of shares. The Company will start sending reminders to all such shareholders, to the addresses available in its database. The Company will commence
disclosing the details of the shares transferred to the demat suspense account, as applicable, in its future annual reports.
GOVERNANCE OF SUBS ID IAR IES
The subsidiaries of the Company are managed by experienced Board of Directors. The minutes of all the subsidiaries are reviewed by the Board of Directors of the Company on a regular basis. In compliance with Clause 49 of the Listing Agreement, Mr. R. K. Ahooja, Independent Director is representative of the Company on the Board of Directors of material non-listed Indian subsidiary, BILT Graphic Paper Products Limited.
CEO /CFO CERT IF ICAT ION
The Managing Director and Chief Financial Officer have certified to the Board with respect to the financial statements, internal controls and other matters, as required by Clause 49 of the Listing Agreement with Stock Exchanges.
REPORT ON CORPORATE
GOVERNANCE
This chapter, read with the information given in the section titled Additional Shareholders’ Information, constitute the compliance report on Corporate Governance for the Financial Year 2009-10.
AUD ITORS ’ CERT IF ICATE ON
CORPORATE GOVERNANCE
The Company has obtained a certificate from the Statutory Auditors of the Company regarding compliance of conditions of Corporate Governance prescribed by Clause 49 of the Listing Agreement with Stock Exchanges, which is attached herewith.
ADD IT IONAL SHAREHOLDERS ’
INFORMAT ION
ANNUAL GENERAL MEET ING
Date 1 December 2010 Time 12:00 noon Venue P.O. Ballarpur Paper Mills - 442 901, Distt. Chandrapur, Maharashtra
F INANC IAL CALENDAR 2010 -11
Financial year July – June Financial Results Normally within 45 days of end of the Quarter, except 4th Quarter and audited annual results which shall be published within 60 days.
BOOK CLOSURE
The dates of book closure are from 18 November 2010 to 1 December 2010, both days inclusive.
DIV IDEND PAYMENT
A final dividend of Rs. 0.50 per Equity Share will be paid within the prescribed statutory period, subject to declaration by the shareholders at the ensuing Annual General Meeting.
UNCLA IMED D IV IDENDS
Dividends pertaining to the financial years, as detailed below, which remain unclaimed and unpaid for a period of seven years, will be transferred to the Investor Education and Protection Fund (IEPF), as required statutorily. No claim shall lie against the Company or IEPF, for the amount transferred. To enable the members to claim their dividend before its transfer to the above Fund, the tentative schedule for transfer is given in Table 7.
UNCLA IMED BUY BACK
CONS IDERAT ION
The shareholders, who have not received their buy back consideration warrants, are requested to notify the Company of non-receipt and claim the same.
L IST ING DETA ILS
At present, the Equity Shares of the Company are listed on Bombay Stock Exchange Limited (BSE) and The National Stock Exchange of India Limited (NSE) amongst exchanges in India. The annual listing fee for the financial year 2010-11 has been paid to both the Stock Exchanges. The Company’s stock codes at various exchanges are given in Table 8.
Table 9 gives the details of monthly price and volumes traded of BILT’s shares at the BSE and the NSE, while charts A and B compare the price movements of BILT’s share with respect to the BSE SENSEX and the NSE NIFTY.
REG ISTRAR AND TRANSFER AGENT
The Share Transfer Agent for the Equity Shares of the Company, both in physical and electronic form is: M/s RCMC Share Registry (P) LimitedB-106, Sector – 2, Noida (U.P.)Tel +91-120-4015880Fax +91-120-2444346
For Fixed Deposits, the investors may contact at: Fixed Deposit DepartmentBallarpur Industries Limited,First India Place, Tower – C, Block – A,
35CORPORATE GOVERNANCE
Sushant Lok – I, Mehrauli-Gurgaon Road,Gurgaon – 122 002. Tel +91-124-4099208Email [email protected]
SHARE TRANSFER SYSTEM
The Committee of Directors for Shares approves the transfer of shares and other related issues regularly on a weekly basis. The turnaround time for the share transfer process is generally 15 days, from the receipt of complete documents.
DEMATER IAL ISAT ION OF SHARES
The Equity Shares of the Company are compulsorily traded on the Stock Exchanges, only in dematerialised form and are available for holding in the depository systems of National Securities Depository Limited and Central Depository Services (India) Limited. As on 30 June 2010, 98.33 per cent of the total Equity Shares of the Company were held in dematerialised form, as compared to 97.99 per cent last year.
OUTSTAND ING GDS S / ZCCB S
As on 30 June 2010, there were no outstanding Global Depositary Shares (GDS).
The balance Zero Coupon Convertible Bonds of US Dollar 52.00 Million matured on 13 July 2010 and were redeemed by the Company.
DISTR IBUT ION OF SHAREHOLD ING
Tables 10 and 11 give the distribution of shareholding of the equity shares of the Company by size and ownership class as on 30 June 2010.
TABLE 7 • UNCLAIMED DIVIDENDS
date of declaration of dividend dividend for the financial year tentative schedule for transfer to the investor education and protection fund
24 December 2003 2002-03 January 2011
15 December 2004 2003-04 January 2012
25 January 2005 2004-05 (interim) February 2012
7 December 2005 2004-05 January 2013
24 January 2006 2005-06 (interim) February 2013
12 December 2006 2005-06 January 2014
29 January 2007 2006-07 (interim) February 2014
4 December 2007 2006-07 January 2015
2 December 2008 2007-08 January 2016
18 December 2009 2008-09 January 2017
TABLE 8 • BILT’S STOCK EXCHANGE CODES
ISIN INE294A01037
Bombay Stock Exchange 500102
National Stock Exchange BALLARPUR
Luxembourg Stock Exchange US0585883020
Bloomberg BILT@IN
Reuters Code BILT.BO
TABLE 9 • H IGHS , LOWS AND VOLUMES OF B I LT ’S SHARES FOR 2009 -10 AT BSE AND NSE , INCLUD ING IND ICES
month bombay stock exchange limited national stock exchange of india limited
high (Rs.) low (Rs.) volume (lacs) sensex (close) high (Rs.) low (Rs.) volume (lacs) nifty (close)
July 2009 24.20 16.00 468.54 15670 24.30 16.75 537.70 4636
August 2009 24.25 20.60 248.24 15667 24.25 20.50 285.49 4662
September 2009 25.50 22.85 227.69 17127 25.50 22.90 249.43 5084
October 2009 24.95 21.95 131.87 15896 24.90 21.95 163.66 4712
November 2009 24.55 20.10 109.74 16926 24.60 20.65 161.66 5033
December 2009 26.30 23.70 171.93 17465 26.30 23.70 245.51 5201
January 2010 28.80 23.95 287.19 16358 28.50 23.90 386.66 4882
February 2010 28.70 24.85 79.49 16429 28.20 24.75 121.69 4922
March 2010 27.75 24.85 78.85 17528 27.90 24.90 149.52 5249
April 2010 38.45 23.45 811.06 17559 38.40 25.90 1180.09 5278
May 2010 34.70 29.15 192.59 16945 34.75 29.10 308.62 5086
June 2010 33.00 28.25 197.96 17701 32.90 28.25 356.05 5312
BALLARPUR INDUSTRIES L IMITED • ANNUAL REPORT 2009–1036
REG ISTERED OFF ICE
Ballarpur Industries LimitedP.O. Ballarpur Paper Mills - 442 901Distt. Chandrapur, Maharashtra
PLANT LOCAT IONS
Unit SewaGaganpur, P.O. Jeypore Railway Station, Distt. Koraput - 764 002, Orissa
Unit Shree GopalP.O. Yamunanagar, Distt. Yamunanagar,Haryana - 135 001
Unit AshtiP.O. Ashti - 442 707, Tehsil Chamorshi,Distt. Gadchiroli, Maharashtra
ADDRESS FOR CORRESPONDENCE
For share transfer, dematerialisation of shares, payment of dividend and any other related queries of Analysts, FIIs, Institutions, Mutual Funds, Banks and others is: Corporate Secretarial Department, Ballarpur Industries Limited,First India Place, Tower – C, Block – A,Sushant Lok – I, Mehrauli-Gurgaon Road,Gurgaon – 122 002.Tel: +91-124-2804242/43Fax: + 91-124-2804261Email: [email protected]
For and on behalf of the Board of Directors
GAUTAM THAPARChairman
R. R. VEDERAHManaging Director
B. HARIHARANGroup Director (Finance)
Date 19 August 2010Place New Delhi
Note: Both BILT’s share price at the BSE and the SENSEX have been indexed to 100 as of 1 July 2009
120
200
80
160
60
140
40
20
100
180
JUL 09 AUG 09 SEP 09 OCT 09 NOV 09 DEC 09 JAN 10 FEB 10 MAR 10 APR 10 MAY 10 JUN 10
CHART A • B I LT ' S SHARE PERFORMANCE VERSUS BSE SENSEX
BILT
OTHERS
Note: Both BILT’s share price at the NSE and the NIFTY have been indexed to 100 as of 1 July 2009
120
200
80
160
60
140
40
20
100
180
JUL 09 AUG 09 SEP 09 OCT 09 NOV 09 DEC 09 JAN 10 FEB 10 MAR 10 APR 10 MAY 10 JUN 10
CHART B • B I LT ' S SHARE PERFORMANCE VERSUS N IFTY SENSEX
BILT
OTHERS
50
37CORPORATE GOVERNANCE
DECLARAT ION OF COMPL IANCE
W ITH CODE OF CONDUCT
As required by Clause 49 of the Listing Agreement, the CEO declaration for Code of Conduct is given below:
THE MEMBERS OF
BALLARPUR INDUSTR IES L IM ITED
This is to certify that all Board members and designated senior management personnel have affirmed to the compliance with the ‘Code of Conduct for Directors and senior management’.
For Ballarpur Industries Limited R.R.VederahManaging Director Date 19 August 2010Place New Delhi
CERT IF ICATE
TO THE MEMBERS OF
BALLARPUR INDUSTR IES L IM ITED
We have reviewed the compliance of conditions of Corporate Governance by Ballarpur Industries Ltd. (the Company), for the year ended 30th June 2010 as stipulated in Clause 49 of the Listing Agreement of the Company with Stock Exchanges, with the
relevant records and documents maintained by the Company and furnished to us.
The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.
In our opinion and to the best of our knowledge and according to the information and explanations given to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the abovementioned Listing Agreement.
We state that in respect of investor grievances received during the year ended 30th June 2010, no investor grievance is pending without a reply from the Company for a period exceeding one month as per the records maintained by the Company and presented to the Investors’/ Shareholders’ Grievance Committee.
We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the Management has conducted the affairs of the Company.
Dinesh K BachchasPartnerMembership No. 97820
For and on behalf of K.K.Mankeshwar & Co.,Chartered Accountants Place New DelhiDate 19 August 2010
TABLE 10 • SHAREHOLDING PATTERN BY SIZE AS ON 30 JUNE 2010
number of equity shares held number of share holders # per cent of share holders number of shares # per cent of shareholding
1-1000 77038 88.85 18845989 2.87
1001-5000 7604 8.77 17084403 2.61
5001-10000 1059 1.22 7903200 1.21
10001 and above 1007 1.16 611690247 93.31
Total 86708 100.00 655523839 100.00
# 64607 shareholders hold 644574642 equity shares in demat form.
TABLE 11 • SHAREHOLDING PATTERN BY OWNERSHIP AS ON 30 JUNE 2010
category no. of share holders per cent of share holders
no. of shares held per cent of share holding
Directors, promoters and family members 8 0.01 324371147 49.48
FIIs and FFIs 51 0.06 98973676 15.10
Mutual Funds 43 0.05 60549501 9.23
Financial Institutions/Banks 41 0.05 582347 0.09
Insurance Companies 11 0.01 66467576 10.14
NRIs 1679 1.94 8252384 1.26
Corporates 1392 1.60 28764529 4.39
Individuals and Others 83483 96.28 67562679 10.31
Total 86708 100.00 655523839 100.00
38
directors’ report
Your Directors have pleasure in presenting the Sixty Fifth Annual Report together with the Audited Statement of Accounts for the financial year ended 30 June 2010.
OPERAT IONS
The net sales of your Company increased by 34 per cent over the previous year to Rs. 3794.59 crore. Despite significantly higher depreciation and finance charges on account of significant on stream capacity expansions, your Company increased its net profit after tax by almost 28 per cent over the previous year to Rs. 240.41 crore.
During the year, there were significant turnarounds in the pulp business at Kamalapuram and the Malaysian operations at Sabah Forest Industries Sdn. Bhd. (SFI), your Company’s Malaysian subsidiary. SFI registered an annual domestic volume growth of 30 per cent.
A detailed review of the consolidated performance of your Company is contained in the Management Discussion and Analysis Report, which is given as a separate chapter in the Annual Report.
DIV IDEND
After analysing the profitability of the Company, the Directors have recommended payment of dividend of Rs. 0.50 per Equity
Share of Rs.2/- each (previous year Rs. 0.50 per Equity Share of Rs. 2.00 each on 55,55,23,839 Equity Shares) on the Equity Share capital of your Company for the financial year ended 30 June 2010.
DIRECTORATE
Mr. Gautam Thapar, Chairman and Mr. Sanjay Labroo, Director retire by rotation at the forthcoming Annual General Meeting, and being eligible, offer themselves for re-appointment.
The aggressive growth plans of Avantha Group have resulted in enhanced role of Mr. Thapar at the Group level and accordingly, he stepped down as Executive Chairman with effect from 1 April 2010 and your Directors re-designated him as Non Executive Chairman of your Company with effect from that date and placed on record its deep appreciation for the valuable contributions made and insights provided by Mr Thapar during his tenure as Executive Chairman of your Company.
During the year, Mr. Shardul S. Shroff, in order to comply with Voluntary Guidelines issued by Ministry of Corporate Affairs, which provide that an individual should not remain
as an Independent Director in a Company for more than six years, requested to relieve him as an Independent Director. He was appointed as an Independent Director on the Board of your Company on 19 July 2001. The Directors, at their meeting held on 20 April 2010 accepted his request with immediate effect and placed on record its appreciation for the valuable contributions and insights provided by Mr. Shroff during his tenure as a Director of your Company. The details of the Directors being recommended for re-appointment are contained in the Corporate Governance Report.
PROMOTER GROUP
The Avantha Group includes some companies of the BM Thapar Group, since vested with Mr. Gautam Thapar and the erstwhile LM Thapar Group companies bequeathed to Mr. Gautam Thapar. The BM Thapar Group and LM Thapar Group were recognised by the Securities and Exchange Board of India by its Order dated 8 October 2001 (as modified from time to time). Therefore, your Company and Mr. Gautam Thapar, along with the following entities, constitutes a Group, as defined
39DIRECTORS’ REPORT
FINANCIAL HIGHLIGHTS
IN RS . CRORE
consolidated standalone
particulars 2009-10 2008-09 2009-10 2008-09
Net Sales 3794.59 2824.69 1020.58 999.33
Profit before Interest and Depreciation 818.36 655.76 193.10 232.96
Less: Interest and Finance Charges (Net) 237.12 170.82 22.32 13.78
Profit before Depreciation 581.24 484.94 170.78 219.18
Less: Depreciation 301.89 232.55 83.37 76.95
Net Profit for the year before Tax 279.35 252.39 87.41 142.23
Less: Provision for Taxation 38.94 64.51 29.13 16.84
Net Profit after Tax 240.41 187.88 58.28 125.39
Less: Minority Interest 43.41 21.16 — —
Add: Share of Profit in Associate Companies ---- 1.58 — —
Add: Balance brought forward from the previous year 496.52 404.09 302.53 227.14
Add: Debenture Redemption Reserve no longer required 7.50 7.50 7.50 7.50
Less: Adjustment for change in holding of subsidiary/ associate company 25.86
Leaving a surplus of 701.02 554.02 368.31 360.03
Which your directors recommend, be appropriated as follows:
Transfer to General Reserve 15.00 25.00 15.00 25.00
Payment of Dividend:
Proposed Dividend on 65,55,23,839 Equity Shares of Rs. 2/- each @ 25 per cent (Previous year 2008-09 on 55,55,23,839 Equity Shares @ 25 per cent)
32.78 27.78 32.78 27.78
Add: Dividend Tax 5.44 4.72 5.44 4.72
Balance carried forward to next year’s Accounts 647.80 496.52 315.09 302.53
BALLARPUR INDUSTRIES L IMITED • ANNUAL REPORT 2009–1040
under the Monopolies and Restrictive Trade Practices Act, 1969: BILT Graphic Paper Products Limited, Ballarpur International Holdings B.V., Ballarpur Paper Holdings B.V., Ballarpur International Paper Holdings B.V., Ballarpur International Graphic Paper Holdings B.V., TAF Assets 2 B.V., Sabah Forest Industries Sdn. Bhd., BILT Tree Tech Limited, Ballarpur Speciality Paper Holdings B.V., Ballarpur Packaging Holdings B.V., Ballarpur International Packaging Holdings B.V., Ballarpur Packaging Holdings Private Limited.
JG Containers (Malaysia) Sdn. Bhd., Mirabelle Holdings LLC, Avantha Holdings Limited, BILT Paper Holdings Limited, KCT Papers Limited, KCT Chemicals and Electricals Limited, APR Sacks Limited, THE Paperbase Company Limited, Blue Horizon Investments Limited, Avantha Realty Limited, BILT Industrial Packaging Company Limited, Biltech Building Elements Limited, UHL Power Company Limited, Asia Aviation Limited, Toscana Lasts Limited, Toscana Footwear Components Limited, NQC Global (Mauritius) Limited, NQC International (Mauritius) Limited, NewQuest Services Private Limited, Avantha Technologies Limited, NewQuest Insurance Broking Services Limited, Avantha Power and Infrastructure Limited, Korba West Power Company Limited, TKS Developers Limited, Jhabua Power Limited, Jhabua Power Investments Limited (earlier known as Gleneagles Healthcare Holdings Private Limited), Global Green Company Limited, Global Green USA Limited, GG International N.V., Intergarden N.V., Intergarden (India) Private Limited, Dunakiliti Kanzervuzem Kft, Greenhouse Agraar Kft, Floragarden Tarim Gida Sanay ve Ticaret A.S., Solaris Holdings Limited, Solaris Chemtech Industries Limited, Solaris Industrial Chemicals Limited, Salient Business Solutions Limited, Salient Knowledge Solutions Limited, Salient Financial Solutions Limited, Salient Business Solutions USA, Inc., Sairam Infra Projects Private Limited, Avantha Foundation, Avantha International Holdings B.V., Avantha International Asset B.V., Corella Investments Limited, Gyanodaya Prakashan (P) Limited, Himalayan Hideaways Private Limited, Imerys NewQuest (India) Private Limited, Karam Chand Thapar and Bros. Limited, Leading Line Merchant Traders Private Limited, Lustre International Limited, Mirabelle Trading Pte. Limited, MTP NEW Ocean (Mauritius) Limited, Orient Engineering Commercial Co. Limited, Oyster Buildwell (P) Limited, Prestige Wines and Spirits Pvt. Limited, Puszta Konserv Kft Hungary, Saraswati Travels (P)
Limited, Seer Buildwell (P) Limited, Sohna Stud Farms Private Limited, The Pioneer Limited, Ultima Hygiene Products (P) Limited, Vani Agencies Private Limited, Vanity Propbuild (P) Limited, Varun Prakashan (P) Limited, Crompton Greaves Limited, CG Energy Management Private Limited, CG Capital and Investments Limited, CG-PPI Adhesive Products Limited, Malanpur Captive Power Limited, Brook Crompton Greaves Limited, CG Actaris Electricity Management Limited, CG Lucy Switchgear Limited, International Components India Limited, CG International B.V., Pauwels International N.V., Pauwels Americas Inc., PT Pauwels Trafo Asia, Pauwels Trafo Gent N.V., Pauwels Canada Inc., Pauwels Transformers Inc., Pauwels Trafo Ireland Limited, Pauwels France SA, Pauwels Trafo Belgium N.V., Pauwels Trafo Service N.V., Pauwels Middle East Trading and Contracting Limited, Crompton Greaves Hungary Kft, Transverticum Kft, Ganz Transelektro Villamossagi Zrt., Microsol Holdings Limited, Microsol Limited, Viserge Limited, Microsol UK Limited, Crompton Greaves Germany Gmbh, MSE Power Systems Inc., MSE West LLC, Societe Nouvelle de Maintenance Tranformateurs and Microsol Inc. , Avantha Business Solutions Inc., Pyramid Healthcare Solutions Inc.
SUBS ID IARY COMPANIES
Your Company has two Indian subsidiaries viz. BILT Tree Tech Limited (BTTL) and BILT Graphic Paper Products Limited (BGPPL) and Nine foreign subsidiaries i.e. Seven based in The Netherlands namely Ballarpur International Holdings B.V. (BIH), Ballarpur International Graphic Paper Holdings B.V. (BIGPH), Ballarpur Paper Holdings B.V. (BPH), Ballarpur Speciality Paper Holdings B.V. (BSPH), Ballarpur International Paper Holdings B.V. (BIPH), Ballarpur Packaging Holdings B.V.(BPGH) and Ballarpur International Packaging Holdings B.V. (BIPGH), and two based in Malaysia i.e. Sabah Forest Industries Sdn. Bhd. (SFI) and Ballarpur Packaging Holdings Private Limited (Labuan offshore Financial Services Authority) (BPHPL).
During the year, three Netherlands based subsidiaries were incorporated namely BSPH, BPGH and BIPGH, on 5 October 2009, 26 February 2010 and 3 March 2010 respectively and one subsidiary in Malaysia i.e. BPHPL, was incorporated on 5 March 2010 under Offshore Companies Act, 1990, Labuan.
BTTL is a direct subsidiary and BGPPL is a step down subsidiary of your Company.
As on date, BIH is a wholly owned subsidiary of your Company and holding Company of BIGPH with an equity stake of 79.53 per cent and the balance 20.47 per cent is held by two Private Equity Investors viz. JPMorgan Mauritius Holdings VII Limited (7.60 per cent) and Lathe Investments Pte. Ltd., a wholly owned subsidiary of Government of Singapore Investment Corporation (12.87 per cent). BPH is a wholly owned subsidiary of BIGPH. BPH owns 97.80 per cent of the paid up capital in SFI. BIPH is a wholly owned subsidiary of BPH and holds approx. 100 per cent of paid up equity share capital in BGPPL. BSPH and BPGH are wholly owned subsidiaries of your Company. BIPGH is a wholly owned subsidiary of BPGH and holds 100 per cent ordinary shares of BPHPL.
Your Company has made an application to the Central Government for obtaining an exemption under Section 212 of the Companies Act, 1956, from annexing to this Report, the Annual Reports of the abovementioned subsidiaries, for the year ended 30 June 2010. However, if any Member of the Company or its subsidiaries so desires, the Company will make available the Annual Accounts of the subsidiaries to them, on request. The same will also be available for inspection at the Registered and Head Office of your Company and of its subsidiaries, during working hours upto the date of the Annual General Meeting.
The details of each subsidiary with respect to capital, reserves, total assets, total liabilities, details of investment (except in case of investment in subsidiaries), turnover, profit before taxation, provision for taxation, profit after taxation and proposed dividend are detailed in the Annual Report.
CONSOL IDAT ION OF ACCOUNTS
As required by Accounting Standards AS-21 and AS-23 of the Institute of Chartered Accountants of India, the financial statements of your Company reflecting the consolidation of the Accounts of your Company and its 11 subsidiaries mentioned above are annexed to this Report.
41DIRECTORS’ REPORT
CONSERVAT ION OF ENERGY,
RESEARCH AND DEVELOPMENT,
TECHNOLOGY ABSORPT ION AND
FORE IGN EXCHANGE EARNINGS
AND OUTGO
As required by the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, the relevant particulars pertaining to conservation of energy, research and development, technology absorption and foreign exchange earnings and outgo are given in the prescribed format as an Annexure to this Report.
PART ICULARS OF EMPLOYEES
The statement of particulars, required pursuant to Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) (Amendment) Rules, 2002, forms a part of this Report. However, as permitted by the Companies Act, 1956, the Report and Accounts are being sent to all Members and other entitled persons excluding the above statement. Those interested in obtaining a copy of the said statement, may write to the Company at its Registered Office and the same will be sent by post. The statement is also available for inspection at the Registered Office, during working hours upto the date of the Annual General Meeting.
DIRECTORS ’ RESPONS IB IL I TY
STATEMENT
Your Directors would like to assure the Members that the financial statements for the year under review conform in their entirety to the requirements of the Companies Act, 1956. Your Directors confirm that:
The Annual Accounts have been
prepared in conformity with the applicable Accounting Standards;The Accounting Policies selected and
applied on a consistent basis, give a true and fair view of the affairs of your Company and of the profit for the financial year;Sufficient care has been taken that
adequate accounting records have been maintained for safeguarding the assets of your Company; and for prevention and detection of fraud and other irregularities;The Annual Accounts have been prepared
on a going concern basis.
PREFERENT IAL ALLOTMENT OF
SECUR IT IES
During the year, in order to augment the balance sheet of your Company, meet its long term capital requirements for pursuing expansion/growth opportunities and general corporate purposes, your Directors had approved infusion of fresh equity capital in your Company.
Accordingly, pursuant to the approval of Members of the Company at their Extraordinary General Meeting held on 3 March 2010, an amount of Rs. 300 crore was raised by your Company by allotment on 17 March 2010 on preferential basis of 4.5 crore Equity Shares of Rs. 2/- each, at a price of Rs. 30/- per Equity Share and 5.5 crore Unsecured Compulsorily Convertible Zero Coupon Bonds (ZCB) at a price of Rs. 30/- per ZCB, convertible into 5.5 crore Equity Shares of Rs. 2/- each within 18 months from the date of allotment to BILT Paper Holdings Limited (BPHL), a Promoter of your Company. The ZCB were converted into 5.5 crore Equity Shares of Rs. 2/- each, pursuant to the request of BPHL on 11 June 2010. Consequently, the paid up equity share capital of your Company increased by Rs. 20 crore pursuant to allotment of 10 crore equity shares of Rs. 2/- each and balance Rs. 280 crore was credited to securities premium account.
AUD ITORS
The Statutory Auditors of your Company, M/s. K. K. Mankeshwar & Co., retire at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. Your Company has received a letter from the Statutory Auditors to the effect that their re-appointment, if made at the ensuing Annual General Meeting, would be within the limits prescribed under section 224 (1B) of the Companies Act, 1956.
COST AUD IT
As per the provisions of Section 233B of the Companies Act, 1956, an audit of Cost Accounts in respect of Paper manufactured by your Company at its three units shall be carried out by the Cost Auditors of your Company and the Reports on the same will be submitted to the appropriate authorities, as required under the relevant rules.
CORPORATE GOVERNANCE
The Auditors, M/s. K. K. Mankeshwar & Co., have certified your Company’s compliance of the requirements of Corporate Governance in terms of Clause 49 of the Listing Agreement with the Stock Exchanges. The Report on Corporate Governance together with the said certificate is attached and forms part of this Report.
F IXED DEPOS ITS
Your Company had, effective August 2004, discontinued acceptance of fresh deposits/ renewal of deposits. There is no deposit due for maturity.
Deposits of Rs. 1.02 crore due for repayment as of 30 June 2010 were unclaimed by 375 depositors. As at the date of this Report, Rs. 0.05 crore has been claimed and repaid from this total unclaimed amount.
ACKNOWLEDGEMENT
Your Directors place on record their sincere appreciation for the contributions made by the employees through their dedication, hard work and commitment in achieving your Company’s performance. In an increasingly competitive environment, the collective dedication of employees is delivering superior and sustainable shareholder value.
Your Directors also acknowledge the support and co-operation extended by the Financial Institutions, Analysts, Banks, Government Authorities, Customers, Vendors, Shareholders and Investors at large and look forward to their continued support.
For and on behalf of the Board of Directors
G A U TA M T H A PA R
Chairman
R . R . V E D E R A H
Managing Director
B . H A R I H A R A N
Group Director (Finance)
Date 19 August 2010Place New Delhi
BALLARPUR INDUSTRIES L IMITED • ANNUAL REPORT 2009–1042
ENERGY CONSERVAT ION MEASURES
TAKEN , RESULTS ACH IEVED &
PLANS FOR THE FUTURE , SPEC IF IC
MEASURES TAKEN DUR ING THE
YEAR 2009 -2010 :
Following measures taken for Energy Conservation:-
Reduced Power Consumption by 1. installing VFDs at various locations:a. VFDs installed for Pulp Chest
Pumps, Sump Pumps, Water
Supply Pumps, Disc Filter Shower Pump in Paper Machines & Pulp Mill at Unit Shree Gopal
b. VFDs at Paper Machines & Pulp Mill at Unit Sewa.
ANNEXURE TO D IRECTORS ’ REPORT
FORM A
DISCLOSURE OF PART ICULARS W ITH RESPECT TO CONSERVAT ION OF ENERGY
A. POWER AND FUEL CONSUMPTION
Current Year Previous Year
2009-2010 2008-2009 Paper Paper1. ELECTRICITY
(A) Purchased
UNITS 000 KWH 216,806 178,215
TOTAL AMOUNT Rs.Lacs 8,148 6,704
RATE / UNIT Rs. 3.76 3.76
(B) Own Generation
(i)Through Generator - D.OIL/LSHS/HSD
UNITS 000 KWH - -
Units per litre of D.oiL/LSHS/HSD KWH - -
Cost per unit Rs.
(ii)Through Steam Turbine / Generator
UNITS 000 KWH - -
Units of Power per mt of coal KWH - -
Cost per unit Rs. - -
2 COAL
(Quality used in boilers-GRADES : B,C,D, etc.)
QUANTITY M.T. 40,359 42,468
TOTAL COST Rs.Lacs 931 1,048
Average rate Rs/M.T 2,308 2,468
3 FURNACE OIL/LSHS/LDO/RFO
QUANTITY K.L. 6,667 4,110
TOTAL COST Rs.Lacs 1,667 858
Average Rate Rs/K.L 24,998 20,873
4 OTHERS / INTERNAL GENERATION ETC.
(BLACK LIQUOR SOLIDS FIRED, WASTE HEAT RECOVERY, LPG )
QUANITITY ( COAL EQUIVALENT ) M.T. - -
TOTAL COST Rs.Lacs - -
Average Rate Rs/M.T - -
B • CONSUMPTION PER UNIT OF PRODUCTION
(M .T. /TONNE)
ELECTRICITY COAL FURNACE OIL OTHERS/INTERNAL GENERATION
(KWH/TONNE) (M.T. / TONNE) (K .L . / TONNE) (M.T. /TONNE)
CURRENT PREVIOUS CURRENT PREVIOUS CURRENT PREVIOUS CURRENT PREVIOUS
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
2009-10 2008-09 2009-10 2008-09 2009-10 2008-09 2009-10 2007-08
Paper 1051 859 0.196 0.205 0.032 0.020 0.000 0.000
43DIRECTORS’ REPORT
Replaced old energy in-efficient motors 2. (open type A Class motors) & energy in-efficient pumps with with energy efficient motors (F Class motors) & efficient pumps at Unit Shree Gopal & Unit Sewa.Optimized Voltage in Plants/ Shop Floors 3. and implemented other power saving ideas proposed during Mills’ Lighting Audit at Unit Shree Gopal & Unit Sewa.Optimizing the Pulp refining power in 4. Unit Shree Gopal & Unit Sewa. Identified & minimized idle run time of 5. equipments at all the units. Provided timer based energy efficient 6. street lights in Unit Sewa and energy efficient lighting in Unit Shree Gopal & Unit Ashti.Provided adequate insulation for steam 7. pipe lines to reduce losses.Close monitoring & checking of steam 8. traps & replacement of defective ones.Plugged steam, air & water leakages 9. by attending leakages on-line whereas possible.Installation of turbo air ventilators in 10. place of exhaust fans at Unit Ashti. Installed air pressure booster at 11. rewinder to reduce compressor power consumption at Unit Ashti.Reduction in fossil fuel consumption 12. i.e. coal by utilizing bamboo dust as a supplement fuel at Unit Ashti.
Energy Conservation Measures Planned:The following projects have been planned for implementation to reduce energy & water consumption further:-
Installation of energy efficient screw type 1. air compressor at Unit Ashti.Installation of VFD for FD fan of boiler at 2. Unit Ashti.Modified steam distribution system at 3. Unit Sewa. Use of natural sun light in workshop & 4. machine house area by providing acrylic transparent roof sheets.Optimizing power for air compressors & 5. vacuum pumps to conserve electrical energy. Utilization of treated effluent water in 6. gardening & other plantations in the units to reduce power & fresh water consumption.Installing energy efficient motor & 7. pumps replacing old in-efficient ones in phased manner in Unit Sewa & Shree Gopal.To study the use of thermo-compressor 8. based steam & condensate system at Unit Sewa.
Use of solar power in mill canteens & 9. company guest houses.
FORM B
FORM FOR D ISCLOSURE OF
PART ICULARS W ITH RESPECT
TO TECHNOLOGY ABSORPT ION ,
RESEARCH & DEVELOPMENT
Specific areas in which R&D carried out 1. by the Company:a. Product Quality Enhancement
Improvement in strength —
properties of the packing material at Unit Ashti.Paper Brightness increased —
from 91 per cent ISO to 93 per cent ISO at Unit AshtiFSC Certification —
Improved stiffness & IGT of BCB —
paper by using oxidized starch at Unit Shree GopalGlobal benchmarking of quality —
parameters. b. New Product developed:
New Copier in 70 gsm segment —
i.e. brand ‘Chennai Super King’ & ‘Kolkata Knight Rider’ at Unit Ashti MMPP Chaimos for Quran —
printing, canary yellow in retail segment for export market & sunlit cartridge for west zone market at Unit Shree Gopal
c. Improvement & optimization in manufacturing process
Use of 100 per cent PCC as filler —
in all grades of paper at Unit Ashti.Substitute of Raisamyl Cationic —
Starch for low consumption & cost reduction.Split addition of ClO2 at water —
treatment plant at Unit Ashti.Revision in optical properties —
of BCP & TOT grades by increasing brightness & opacity. Improvement in biocide & slime —
control programme in Unit Shree Gopal, Unit Sewa & Unit Ashti .Replaced Urea & DAP —
with ammonium sulphate & phosphoric acid as ETP nutrients at Unit Shree Gopal.
d. Interactions with printers and printing machine manufacturers to understand customers requirement.
Benefits derived as a result of above 2. R&D:a. The bursting strength of cartons
improved at Unit Ashti b. The liquid PCC from M/S SMI used
as filler in all copier grades inplace of GCC by which smoothness, brightness & opacity improved.
c. Successfully conducted trial with Chem floc. During trial improvement observed in effluent characteristics & consumption reduced compared to tru-floc.
d. The Drew-Chloro flow doses splited at clarifier & reservoir by which drew chloro consumption reduced by 20 per cent.
e. Paper manufactured with indigenous pulp by replacing imported pulps in the furnish for cost reduction.
f. Introducing Amox technology for biocide treatment at Unit Ashti.
g. FSC certification for Unit Ashti, Shree Gopal & Unit Sewa.
h. Increased volume of exports in retail segment
i. Energy & fresh water conservation.j. Environment compliance.
Future Plan of Action: 3. a. Product Quality Improvement:
Single Nip Calender for PM-5 i. at Shree Gopal, from Gapcon (Germany) QCS & Calliper control for ii. PM-4 & 5 at Unit Shree Gopal.2iii. nd Synchro Sheeter at Shree Gopal Unit Improving refining pulp with iv. Bio enzyme at Unit AshtiUp-gradation of pulp bleaching v. sequence to CD-EOP-D1-D2 at Unit SewaUse of PCC as a filler at Unit vi. Sewa.Replacing HDPE tops with vii. Ceramic ones for suction boxes at paper machines at Unit Shree Gopal.Improved brightness of REB & viii. Super Printing Paper.
b. Increasing Ash per cent in paper at Unit Ashti, by PCC Treatment Technology by SMI.
c. Reduction in fresh water consumption in all Units
d. Installation of on line stack emission monitoring system.
e. Installation of coal dust arrestor & vent bag filter to reduce dust emission.
BALLARPUR INDUSTRIES L IMITED • ANNUAL REPORT 2009–1044
f. Development of high bright paper of above 88 per cent ISO
g. Use of NCG burning in Lime Kiln.h. Potential CDM projects/ Carbon
trading.
Expenditure on R&D (including through 4. approved agencies): Rs.Laca. Capital (incl. WIP & Misc.) Nilb. Revenue 21.19c. Total 21.19d. Total Expenses as a
per cent of turnover 0.021%
TECHNOLOGY ABSORPT ION ,
ADAPTAT ION & INNOVAT ION
Efforts made in brief towards technology 1. absorption:a. New servall rewinder & new single
nip calander for PM-4 at Unit Shree Gopal.
b. Synchro sheeter & on-line ream packer at Unit Shree Gopal
c. New centricleaner system on PM-1; New DCS system and Induction profiler on PM-2 at Unit Sewa.
d. Hot stock screen in pulp mill at Unit Sewa.
e. In-house R&D technology has been successfully absorbed for the improvement of products and development of new value added products for paper.
f. Optimisation of process parameters, fibrous and non-fibrous inputs.
Benefits derived as a result of the above:2. Improved product quality —
Cost reduction —
Sustenance in business through —
improved product quality, new product developed & cost effectivenessStakeholders satisfaction —
In case of imported technology 3. (imported during the last 5 years reckoned from the beginning of the financial year):a. Technology Imported: Induction
Profiler, DCS System, New A4, Hot Stock Screening & Centicleaner
b. Year of Import : 2008-09 & 2009-10 c. Has technology been fully
absorbed: Yes
d. If not fully absorbed areas where this has not taken place, reasons therefore and future plant of action: N.A.
FORM C
FORE IGN EXCHANGE EARNINGS
AND OUTGO
Activities relating to exports, initiatives 1. taken to increase:Company’s brands have been well accepted in the international markets Coated paper is being regularly exported to markets like USA, Canada, Europe etc and the product quality is appreciated by discerning customers in these developed & matured markets.Total Foreign Exchange used and 2. earned:a. Foreign Exchange used
– Rs. 115.44 Croreb. Foreign Exchange earned
– Rs. 26.52 Crore.
45
auditors’ report
BALLARPUR INDUSTRIES L IMITED • ANNUAL REPORT 2009–1046
TO THE MEMBERS OF BALLARPUR
INDUSTR IES L IM ITED
We have audited the attached Balance 1. Sheet of M/s Ballarpur Industries Limited, as at 30th June 2010, and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto, in which are incorporated the audited accounts of Unit of the Company, audited by other auditors.These financial statements are the responsibility of the Company’s Management. Our responsibility is to express an opinion on these financial statements based on our audit.We have conducted our audit in 2. accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.As required by the Companies (Auditor’s 3. Report) Order, 2003, as amended by the Companies (Auditor’s Report) (Amendment) Order, 2004 (‘the Order’) issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure ‘A’ a statement on the matters specified in paragraphs 4 and 5 of the said Order.Further to our comments in the 4. Annexure referred to in paragraph 3 above, we also report that:
We have obtained all the i. information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;In our opinion, proper books of ii. account as required by law have been kept by the Company, so far as appears from our examination of books;The reports on the accounts iii. audited by the Unit Auditors, have
been properly dealt with by us while preparing our report;The Balance Sheet, Profit and iv. Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;In our opinion, the Balance Sheet, v. Profit and Loss Account and Cash Flow Statement read together with the Notes thereon comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;On the basis of written vi. representations received from the Directors, as on 30th June, 2010 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 30th June, 2010 from being appointed as a Director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956; andIn our opinion and to the best of vii. our information and according to the explanations given to us, the said Accounts read with the Notes thereon give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:
in the case of the Balance a. Sheet, of the state of affairs of the Company as at 30th June, 2010;in the case of the Profit and Loss b. Account, of the profit for the year ended on that date; andin the case of the Cash Flow c. Statement, of the cash flows for the year ended on that date.
D I N E S H K U M A R B A C H C H A S
PARTNER
Membership No. 097820For and on behalf of
K . K . M A N K E S H WA R & C O . ,
CHARTERED ACCOUNTANTS
FRN- 106009W
New Delhi, dated the19th August 2010
ANNEXURE ‘ A’
(Referred to in paragraph 3 of our report of even date)In terms of the information and explanations given to us and books and records examined by us and the Unit Auditors in the normal course of audit and to the best of our information and belief, we state that:1. a. The Company has maintained proper
records showing full particulars including quantitative details and situation of fixed assets.
b. The fixed assets were physically verified during the year by the Management in accordance with a programme of verification, covering all fixed assets over a period of three years. There were no material discrepancies noticed on such verification. In our opinion, having regard to the size of the Company and the nature of its operations, the frequency of verification is reasonable.
c. Based on the information and explanations given by the Management and on the basis of audit procedures performed by us, we are of the opinion that the fixed assets disposed off during the year does not constitute a substantial part of the fixed assets of the Company and such disposal has not affected the going concern.
2. a. The inventory (excluding stocks with third parties and stocks lying at outside warehouses) has been physically verified by the Management. In our opinion, the frequency of verification is reasonable.
b. In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business.
c. On the basis of our examination of the records of inventory, we are of the opinion that the Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.
The Company has not granted or taken 3. any loan, secured or unsecured, to or from companies, firms or other parties covered in the registers maintained in pursuance of Section 301 of the
47AUDITORS’ REPORT
Companies Act, 1956. Accordingly, paragraph 4(iii) of the Companies (Auditor’s Report) Order is not applicable to the Company.In our opinion and according to the 4. information and explanations given to us, having regard to the explanation that certain items purchased/ services availed are of special nature for which suitable alternative sources do not exist for obtaining comparative quotations, there are adequate internal control systems commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, no major weakness has been noticed in the internal controls system.In respect of the transactions entered in 5. the registers maintained in pursuance of Section 301 of the Companies Act, 1956:To the best of our knowledge and belief a. and according to the information and explanations given to us, transactions that needed to be entered into the register have been so entered.
In our opinion and according to the b. information and explanations given to us, and excluding certain transactions of purchase of goods/ services availed and material of special nature for which alternative quotations are not available, where each of such transactions is in excess of five lakh rupees in respect of any party, transactions have been made at prices which are prima facie reasonable having regard to prevailing market prices at the relevant time.
In our opinion and according to the 6. information and explanations given to us, the Company has complied with the provisions of the Section 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. According to the information and explanations given to us, no order has been passed by the Company Law Board on the Company.In our opinion, the Company has an 7. internal audit system commensurate with the size and nature of its business.We have broadly reviewed the books of 8. account and records maintained by the Company relating to the manufacture of Paper pursuant to the Rules made by the Central Government for the maintenance of cost records under Section 209 (1) (d) of the Companies
Act, 1956 and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determining whether they are accurate or complete.
9. a. According to the records of the Company, the Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education protection fund, employees’ state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other statutory dues applicable to it.
b. According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, service tax, custom duty and excise duty were outstanding, as at 30th June, 2010 for a period of more than six months from the date they became payable except where the liabilities are specifically deferred by the Government.
c. According to the information and explanations given to us and the records of the Company, the particulars of dues of sales tax, excise duty, custom duty, income tax and cess as on 30th June, 2010 which have not been deposited on account of disputes have been stated in Note 2(b) of Schedule M of the financial statements.
The Company has no accumulated 10. losses as at 30th June, 2010 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year. According to the records of the Company 11. examined by us and the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the Balance Sheet date.According to the information and 12. explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.The provisions of any special statute 13. applicable to chit fund/ nidhi/ mutual benefit fund/ societies are, in our opinion, not applicable to the Company.
In our opinion, the Company is not a 14. dealer in shares, securities, debentures and other investmentsAccording to the information and 15. explanations given to us, the Company has not given guarantee for loans taken by others from banks or financial institutions. In our opinion, according to the 16. information and explanations given to us and to the best of our knowledge and belief on an overall basis, the term loans taken and/ or utilized during the year have been applied for the purpose for which they were obtained, other than temporary deployment of such funds.On the basis of an overall examination of 17. the balance sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short-term basis which have been used for long-term investment and vice versa. According to the information and 18. explanations given to us, the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.The Company has created security or 19. charge in respect of secured debentures issued and outstanding at the year end.The Company has not raised any money 20. by public issue during the year.During the course of our examination of 21. the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the Management.
D I N E S H K U M A R B A C H C H A S
PARTNER
Membership No. 097820For and on behalf of
K . K . M A N K E S H WA R & C O . ,
CHARTERED ACCOUNTANTS
FRN- 106009W
New Delhi, dated the19th August 2010
ballarpur industries l imited • annual report 2009–1048
As per our report attachedDINESH KUMAR BACHCHASPartner Membership No. 097820For and on behalf ofK. K. MANKESHwAR & Co.Chartered AccountantsFRN: 106009W
New Delhi, dated the19th August, 2010
GAutAM thApARchairmanR. R. VeDeRAhmanaging directorB. hARihARANgroup director (finance)ViVeK KuMAR GOYALchief financial officerAKhiL MAhAJANcompany secretary
New Delhi, dated the19th August, 2010
All Amount in indiAn Rupees thousAnds except shARe dAtA
BALANce Sheet as at june 30, 2010
Schedule 30.06.2010 30.06.2009 I. SoURCES oF FUNDS1. SHAREHoLDERS' FUNDS
(a) Share capital "A" 1,311,234 1,111,234
(b) Reserves & Surplus "B" 15,201,781 12,386,488
16,513,015 13,497,722
2. LoAN FUNDS(a) Secured Loans "c" 3,864,525 5,090,402
(b) unsecured Loans "D" 4,756,292 3,806,037
8,620,817 8,896,439
3. DEFERRED TAX LIABILITY (Net of Assets) 1,008,713 968,713
Total 26,142,545 23,362,874
II. APPLICATIoN oF FUNDS1. FIXED ASSETS(a) Gross Block "e" 15,661,674 13,625,437
Less: Depreciation & impairment 5,945,866 5,137,286
Net Block 9,715,808 8,488,151
(b) construction and installation–in–progress 855,139 1,918,260
including expenditure thereon (pending Allocation)
(c) Advance against capital Assets 29,613 22,353
10,600,560 10,428,764
2. INVESTMENTS "F" 11,510,275 2,855,471
3. CURRENT ASSETS, LoANS & ADVANCES(a) interest accrued on investments and Fixed Deposits 239 197
(b) inventories "G" 1,783,281 1,300,003
(c) Sundry Debtors "h" 2,218,652 2,054,245
(d) cash and Bank Balances "i" 821,917 104,107
(e) Loans and Advances "J" 4,447,613 10,298,534
9,271,702 13,757,086
LESS: CURRENT LIABILITIES AND PRoVISIoNS "K"
(a) current Liabilities 2,625,330 1,461,066
(b) provisions 2,614,662 2,254,030
5,239,992 3,715,096
Net Current Assets 4,031,710 10,041,990
4. MISCELLANEoUS EXPENDITURE "L" – 36,649
(to the extent not written off or adjusted)
NoTES To BALANCE SHEET "M"
Total 26,142,545 23,362,874
Note: Schedules "A" to "M" referred to above form an integral part of the Balance Sheet.
F inancials 49
As per our report attachedDINESH KUMAR BACHCHASPartner Membership No. 097820For and on behalf ofK. K. MANKESHwAR & Co.Chartered AccountantsFRN: 106009W
New Delhi, dated the19th August, 2010
GAutAM thApARchairmanR. R. VeDeRAhmanaging directorB. hARihARANgroup director (finance)ViVeK KuMAR GOYALchief financial officerAKhiL MAhAJANcompany secretary
New Delhi, dated the19th August, 2010
pROFit & LOSS AccOuNt for the year ended june 30, 2010
Schedule 30.06.2010 30.06.2009 INCoMESales "i" 10,591,132 10,535,678
Less: excise Duty 385,353 542,368
Net Sales 10,205,779 9,993,310
Other income "ii" 63,195 49,503
increase / (Decrease) in Stocks "iii" 34,420 214,020
Total 10,303,394 10,256,833
EXPENDITUREManufacturing costs "iV" 6,566,364 6,475,062
purchases 566,741 432,620
personnel costs "V" 697,591 617,964
Administration, Selling & Miscellaneous costs "Vi" 505,045 360,631
Deferred Revenue expenditure - Amortised (Net) 36,649 40,973
interest and Finance costs (Net) "Vii" 223,226 137,766
Depreciation & impairment 833,743 769,544
Total 9,429,359 8,834,560
Profit Before Taxation 874,035 1,422,273
provisions for taxation
current tax 251,201 107,185
Deferred tax 40,000 52,535
Fringe Benefits tax – 8,700
291,201 168,420
Profit After Taxation 582,834 1,253,853
Add: Balance brought forward from last year 3,025,269 2,271,384
Add :Debenture Redemption Reserve no longer required 75,000 75,000
Amount available for Appropriation 3,683,103 3,600,237
APPRoPRIATIoNSGeneral Reserve 150,000 250,000
Proposed Dividend:On 655523839 equity shares @ 25 % 327,762 –
(On 555523839 equity shares @ 25%) – 277,762
327,762 277,762
Add: Dividend tax on above 54,437 47,206
382,199 324,968
Balance carried to Balance Sheet 3,150,904 3,025,269
NOteS FORMiNG pARt OF pROFit AND LOSS AccOuNt "Viii"
3,683,103 3,600,237
BASic eARNiNGS peR ShARe (RS.) 1.02 2.26
DiLuteD eARNiNGS peR ShARe (RS.) 0.92 2.02
All Amount in indiAn Rupees thousAnds except shARe dAtA
ballarpur industries l imited • annual report 2009–1050
All Amount in indiAn Rupees thousAnds except shARe dAtA
Notes
1. the above statement has been prepared following the indirect method.
2. increase in Fixed assets are stated inclusive of movements of capital work in progress and capital advances between the beginning and the end of the year.
3. proceeds from long term and other borrowings are shown net of repayments.
4. cash and cash equivalents represent cash and bank balances only.
5. Figures of previous year have been rearranged and regrouped wherever necessary to conform to current year classifications.
As per our report attachedDINESH KUMAR BACHCHASPartner Membership No. 097820For and on behalf ofK. K. MANKESHwAR & Co.Chartered AccountantsFRN: 106009WNew Delhi, dated the19th August, 2010
GAutAM thApAR chairmanR. R. VeDeRAh managing directorB. hARihARAN group director (finance)ViVeK KuMAR GOYAL chief financial officerAKhiL MAhAJAN company secretary
New Delhi, dated the19th August, 2010
30.06.2010 30.06.2009 A. CASH FLow FRoM oPERATING ACTIVITIESNet Profit before Tax and Appropriations 874,035 1,422,273 Add /(Less) :
Adjustments for :(profit) / Loss on sale of Assets (investing Activity) (100) 8 unspent Liabilities and excess provisions of earlier years written back (4,661) (3,771)profit on sales of investment (24,160) –interest and Finance costs (net) 223,226 137,766 Depreciation & impairment 833,743 769,544 Deferred revenue expenses amortised 36,649 40,973
operating Profit before working Capital changes 1,938,732 2,366,793 Adjustments for working Capital changes :
trade payable and others 1,042,816 93,772 inventories (483,278) 44,593 trade and other receivables (164,407) (201,725)Loans and Advances 6,181,068 (483,221)
Cash generated from operations 8,514,931 1,820,212 Deferred Revenue expenditure (net) – (17,998)Direct taxes (net) (330,145) (403,842)
NET CASH INFLow FRoM oPERATING ACTIVITIES 8,184,786 1,398,372 B. CASH FLow FRoM INVESTING ACTIVITIES
increase in Fixed Assets, capital Wip, capital Advances (Net) (1,005,502) (2,635,496)Sale of assets ( Net) 63 422,882 Refund of advances – 1,512,900 Advance for investment – (2,119,265)Redemption of investment 131,403 –Subscription / purchase of equity Shares (8,762,047) (199,108)
NET CASH USED IN INVESTING ACTIVITIES 9,636,083 (3,018,087)C. CASH FLow FRoM FINANCING ACTIVITIES
proceeds from (issuance / Repayment) of share capital net 13,500,000 –payment for Buyback (compulsory & Optional) (688) (2,945)proceeds from issuance of unsecured zero coupon compulsory convertible bonds 1,650,000 –increase / (Decrease) in long term and other borrowings (net) (275622) (1,284,574)interest and Financing charges (net) (228,581) (170,841)Dividend paid (including dividend tax) (326,002) (455,648)
NET CASH USED IN FINANCING ACTIVITIES 2,169,107 (1,914,008)NET INCREASE IN CASH AND CASH EQUIVALENTS [A+B+C] 717,810 (3,533,723)CASH AND CASH EQUIVALENTS (oPENING BALANCE) 104,107 3,637,830 CASH AND CASH EQUIVALENTS (CLoSING BALANCE) 821,917 104,107
cASh FLOW StAteMeNt for the year ended june 30, 2010
F inancials 51
All Amount in indiAn Rupees thousAnds except shARe dAtA
I. PRE-SPLIT AND BUYBACK oF EQUITY SHARES :
a) 35,000 equity Shares of Rs. 10/- each allotted as fully paid up without payment being received in cash.
b) 15,423,900-1/2 equity Shares of Rs. 10/- each allotted as fully paid up by way of Bonus Shares capitalised from General Reserve and Share premium
Account.
c) 950,000 equity Shares of Rs.10/- each fully paid up issued to Financial institutions on part conversion of Loans/Debentures.
d) 4,374,945 equity Shares of Rs.10/- each allotted as fully paid up to the Shareholders of Amalgamating companies pursuant to the Schemes of
Amalgamation.
e) 135,174 equity Shares of Rs.10/- each allotted as fully paid up on conversion of 237-4% euro Bonds of the Face Value of uS$ 11,85,000/-.
f) 11,887,469 equity Shares of Rs.10/- each allotted as fully paid up, in terms of Scheme of Arrangement & Reorganisation.
g) 12,649,218 equity Shares of Rs.10/- each allotted as fully paid up, pursuant to the scheme of Arrangement & Amalgamation between the company
and Bilt Graphic papers Ltd.
h) 21,160,820 equity shares of Rs 10/- each allotted as fully paid up against Global Depository Shares (GDS) aggregating to uSD 35 Million.
i) 92,775 equity Shares of Rs.10/- each allotted as fully paid up on conversion of 9.5 % Fully convertible Debentures.
j) 23,278,276 equity shares of Rs.10/- each allotted in the previous year at a premium of Rs. 76.20/- per share against conversion of Foreign currency
convertible Bonds (FccB) of Face Value uS$ 45,000,000.
II. PoST-SPLIT AND BUYBACK oF EQUITY SHARES :
a) pursuant to the Scheme of Arrangement and Reorganisation under Section 391 - 394 of the companies Act 1956, approved by high court of Mumbai
(Nagpur Bench) vide its order dated 30.11.2007 (Scheme), one equity Share of Rs. 10/- each was subdivided into five equity Shares of Rs. 2/- each
and simultaneous compulsory buyback of two equity Shares of Rs. 2 each at a price of Rs. 25/- each per share. consequently 371,414,860, equity
Shares of Rs. 2/- each were bought back by the company at a price of Rs. 25/- per share.
b) pursuant to the Scheme, certain small shareholders, holding 1,598,451 equity share of Rs. 2/- each exercised their option for buyback at a price of
Rs. 30/- per share. and were bought back by the company.
c) During the year, the company had allotted the following equity shares to Bilt paper holdings Limited (BphL), a promoter:
(i) 45,000,000 equity Shares at Rs. 30/- per share (face value of Rs. 2/- and premium of Rs. 28/-)
(ii) 55,000,000 equity Shares at Rs. 30/- per share (face value of Rs. 2/- and premium of Rs. 28/-) upon conversion of 55,000,000 unsecured zero coupon
compulsory convertible bonds.
30.06.2010 30.06.2009
SCHEDULE "A": SHARE CAPITAL
AUTHoRISED
1487500000 equity Shares of Rs. 2/- each 2,975,000 2,975,000
(previous Year 1487500000 equity Shares of Rs.2/- each)
10250000 (previous Year 10250000) preference shares of Rs. 100/-each 1,025,000 1,025,000
4,000,000 4,000,000
ISSUED
1030005910 equity Shares of Rs. 2/- each 2,060,012 1,860,012
(previous Year 930005910 equity Shares of Rs. 2/- each)
2,060,012 1,860,012
SUBSCRIBED AND PAID UP
655773584 equity Shares of Rs. 2/- each 1,311,546 1,111,546
(previous Year 555773584 equity Shares of Rs. 2/- each)
Less : 249745 equity Shares of Rs. 2/- each forfeited 499 499
(previous Year 249745 equity Shares of Rs. 2/- each forfeited)
655523839 equity Shares of Rs.2/- each 1,311,047 1,111,047
Add: Forfeited Shares (amount paid up) 187 187
1,311,234 1,111,234
ScheDuLeS “A” tO “M” attached to and forming part of the balance sheet as at June 30, 2010
ballarpur industries l imited • annual report 2009–1052
All Amount in indiAn Rupees thousAnds except shARe dAtA
30.06.2010 30.06.2009
SCHEDULE "B" RESERVES & SURPLUS
CAPITAL RESERVE
As per Last Account 151,546 151,546
SHARE PREMIUM ACCoUNT
As per Last Account 317,314 428,394
Add : premium received on issue of equity shares 2,800,000 –
Less : Security premium payable on redemption of ZccB 185,342 207,731
Add : Security premium on Buyback of uSD 8 Mn ZccB during the year – 96,651
2,931,972 317,314
PREFERENCE SHARE CAPITAL REDEMPTIoN RESERVE
As per Last Account 738,469 738,469
GENERAL RESERVE
As per Last Account 7,853,890 7,603,890
Add: transferred from profit & Loss Account 150,000 250,000
8,003,890 7,853,890
DEBENTURE REDEMPTIoN RESERVE
As per Last Account 300,000 375,000
Less: transferred to profit & Loss Account 75,000 75,000
225,000 300,000
BALANCE AS PER PRoFIT & LoSS ACCoUNT 3,150,904 3,025,269
15,201,781 12,386,488
ScheDuLeS “A” tO “M” attached to and forming part of the balance sheet as at June 30, 2010
F inancials 53
All Amount in indiAn Rupees thousAnds except shARe dAtA
30.06.2010 30.06.2009
SCHEDULE "C" SECURED LoANS Notes
Debentures (1) 900,000 1,200,000
term Loans from Banks / Financial institutions (2) 2,964,525 3,890,402
including external commercial Borrowings
3,864,525 5,090,402
30.06.2010 30.06.2009
SCHEDULE "D" UNSECURED LoANS
Fixed Deposits * 10,237 18,905
Loan from Banks 2,481,455 1,522,532
Zero coupon convertible Bonds (uS $ 52 mn) 2,264,600 2,264,600
4,756,292 3,806,037
* unclaimed matured deposits which will be credited to investor education and protection fund. the actual amount to be transferred to the fund will be determined on respective due dates.
Notes1. these comprise of :- (a) the above Debentures are secured by parri-passu first charge created on all immoveable and moveable properties of the company both
present and future. (b) the Debentures referred to above are redeemable at par, in one or more instalments, on various dates with earliest redemption being on
31st July 2010 and the last being due on 30th June 2013.the amount of Debentures due for redemption for the financial year 2010-11 is Rs. 3000 lacs.
2. the above term loans & ecBs are secured by parri passu first charge created/to be created on all immoveable and moveable properties of the company both present and future except ecB from hSBc and citi Bank which is secured by the first parri passu charged on all the moveable properties of the company both present and future.
ScheDuLeS “A” tO “M” attached to and forming part of the balance sheet as at June 30, 2010
ballarpur industries l imited • annual report 2009–1054
Asse
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As a
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As a
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SCH
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FIXE
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A.Ta
ngib
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sset
s
Land
(in
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leas
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d la
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174
,869
–
–
1
74,8
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–
–
–
–
174
,869
1
74,8
69
Bui
ldin
gs 1
,290
,951
2
2,18
9 –
1
,313
,140
4
05,4
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–
442
,987
8
70,1
53
885
,495
Rai
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–
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811
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B.In
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Ass
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Not
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the
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and
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.
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All
Amou
nt in
indi
An R
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s th
ousA
nds
exce
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hARe
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A
Sch
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rt o
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et a
s at
Jun
e 30
, 201
0
F inancials 55
All Amount in indiAn Rupees thousAnds except shARe dAtA
Particulars 30.06.2010 30.06.2009
Face Value or Nos.
Book Value Face Value or Nos.
Book Value
SCHEDULE "F" : INVESTMENTS
GoVERNMENT SECURITIES :
5 - Year Kisan Vikas patra Rs 2000 2 Rs 2000 2
(Lodged as Security Deposit)
6 - Year National Saving certificates Rs 3000 3 Rs 3000 3
7 - Year National Saving certificates Rs 3000 3 Rs 3000 3
oTHER INVESTMENTS :
Subsidiary Companies :
(considered to be of Strategic importance) :
Bilt tree tech Limited 990,000 3,960 990000 3,960
Fully paid equity Shares of Rs.10/- each.
Ballarpur international holdings B.V. 168,679,093 11,428,387 45649900 2,668,668
Fully paid equity Shares of euro 1/- each
(123029193 equity shares subscribed during the year)
Bilt Graphics paper products Ltd 50,000 500 50000 500
Fully paid equity Shares of Rs.10/- each.
Ballarpur Speciality paper holdings B.V. 18,000 1,196
Fully paid equity Shares of euro.1/- each.
(Subscribed during the year)
Ballarpur packaging holdings B.V. 18,000 1,132
Fully paid equity Shares of euro.1/- each.
(Subscribed during the year)
oTHER CoMPANIES :
(considered to be of Strategic importance)
Blue horizon investments Limited 5,000 335 5000 335
Fully paid equity Shares of Rs.10/- each.
Avantha power & infrastructure Limited (earlier Bilt power Limited) 8,372,750 74,757 20384000 182,000
Fully paid equity Shares of Rs.10/- each.
(12011250 equity shares sold during the year)
11,510,275 2,855,471
in Government Securities 8 8
in Fully paid equity Shares 11,510,267 2,855,463
11,510,275 2,855,471
Break-up :
unquoted investments 11,510,267 2,855,463
Others :
Government Securities & Bonds 8 8
11,510,275 2,855,471
ScheDuLeS “A” tO “M” attached to and forming part of the balance sheet as at June 30, 2010
ballarpur industries l imited • annual report 2009–1056
All Amount in indiAn Rupees thousAnds except shARe dAtA
30.06.2010 30.06.2009
SCHEDULE "G": INVENToRIES
(As valued and certified by the Management)
Raw Materials 409,289 244,742
Stock of Stores, Spare parts, chemicals etc. 566,561 405,169
Block Stores 6,843 8,566
Raw Materials and Stores-in-transit 151,041 26,399
Stock-in-trade :
Finished Stock - 556,450 535,329
Stock-in-process - 93,097 79,798
1,783,281 1,300,003
SCHEDULE "H": SUNDRY DEBToRS
Debts outstanding for a period exceeding six months :
Secured -
considered Good 13,495 6,873
unsecured -
considered Good 62,706 69,655
76,201 76,528
Other Debts :
Secured -
considered Good 61,761 204,418
unsecured -
considered Good 2,080,690 1,773,299
2,142,451 1,977,717
2,218,652 2,054,245
SCHEDULE "I": CASH AND BANK BALANCES
cash on hand 1,698 1,193
Bank Balances :
With Scheduled Banks -
On current Accounts 26,670 30,358
On Margin Money Accounts 8,477 11,477
On Fixed Deposit Accounts 751,548 25,838
(lodged as security deposit Rs. 288 thousands)
On employees' Security Deposit Account in Savings Bank 307 302
On compulsory Buyback 19,373 20,021
On Optional Buyback 207 247
On unpaid Dividend Accounts 13,637 14,671
820,219 102,914
821,917 104,107
ScheDuLeS “A” tO “M” attached to and forming part of the balance sheet as at June 30, 2010
F inancials 57
All Amount in indiAn Rupees thousAnds except shARe dAtA
30.06.2010 30.06.2009
SCHEDULE "J": LoANS AND ADVANCES
unsecured - considered Good
Loan to Subsidiaries – 4,167,276
Advances, Deposits and prepaid expenses recoverable in cash or in kind or for to be received 1,591,674 1,268,893
Advance Against investment 126 2,119,265
Due From Subsidiaries and Step Down Subsidiaries 155,737 318,761
Balance with customs and excise Authorities 79,120 133,528
Advance tax , tax deducted at Source (including income tax refund receivable) 2,252,556 1,922,411
MAt credit entitlement 368,400 368,400
4,447,613 10,298,534
Advance include amount advanced to Directors Rs. 2831 thousands
(Maximum amount outstanding at any time during the year Rs. 3162 thousands)
SCHEDULE "K": CURRENT LIABILITIES AND PRoVISIoNS
A. CURRENT LIABILITIES
For Acceptances 131,320 15,248
Sundry creditors - Micro, Small and Medium enterprises 19,458 19,659
Sundry creditors - Other creditors 1,406,584 553,579
(includes interest free sales tax loan/deferral)
Security Deposits (including interest accrued thereon) 139,127 138,574
Advances Received From customers 20,681 –
provision on Security premium payable on redemption of ZccB 817,068 631,727
unclaimed Dividend / Dividend payable * 13,610 14,644
employees Security Deposit 307 302
unclaimed compulsory Buyback consideration 19,373 20,021
unclaimed Optional Buyback consideration 207 247
commission payable to chairman, MD and other Directors 21,859 26,016
interest on Loans accrued but not due 35,736 41,049
2,625,330 1,461,066
B. PRoVISIoNS
provision for taxation 1,917,850 1,666,649
provision for proposed Dividend 327,762 277,762
provision for Dividend tax 54,437 47,206
provision for Retirement Benefit 314,613 262,413
2,614,662 2,254,030
5,239,992 3,715,096
* includes amount to be transferred to investor education and protection Fund which will be determined on the respective due dates.
AS AT 01.07.2009
EXPENDITURE DURING THE
YEAR
wRITTEN oFF DURING THE YEAR (NET)
BALANCE AS AT 30.06.2010
SCHEDULE "L : MISCELLANEoUS EXPENDITURE
(to the extent not written off or adjusted)
eRS / VRS compensation 36,649 – 36,649 –
36,649 – 36,649 –
ScheDuLeS “A” tO “M” attached to and forming part of the balance sheet as at June 30, 2010
ballarpur industries l imited • annual report 2009–1058
SCHEDULE “M”: SIGNIFICANT ACCoUNTING PoLICIES AND NoTES1. SIGNIFICANT ACCoUNTING PoLICIES A. FIXED ASSETS –TANGIBLE 1. Fixed Assets are stated at cost net of ceNVAt/Value Added tax, rebates, less accumulated depreciation and impairment loss, if
any.
2. All costs, including financing costs till commencement of commercial production, net charges on foreign exchange contract and
adjustments arising from exchange rate variations attributable to fixed assets are capitalized.
3. preoperative expenditure :
indirect expenditure incurred during construction period is capitalized under the respective asset head as a part of the indirect
construction cost, to the extent to which the expenditure is indirectly related to the assets head. Other indirect expenditure incurred
during the construction period, which is not related to the construction activities or which is not incidental thereto is written off in
the profit and loss account.
B. DEPRECIATIoN Depreciation on Fixed Assets is provided on Straight Line Method on certain Assets and on Written down Value Method on other Assets in
accordance with Schedule XiV of the companies Act, 1956, except in case of improvements to leased premises which are amortised over
the period of lease. Land is not depreciated. Depreciation on revalued portion of fixed Assets, as applicable, is appropriated and adjusted
out of Revaluation Reserve if available with the company, on a global pooling basis and the balance is charged off in Accounts.
C. FIXED ASSETS –INTANGIBLE Assets identified as intangible assets are stated at cost including incidental expenses thereto, and are amortised over a predetermined
period.
D. INVENToRY VALUATIoN Raw Materials, Stores, Spare parts, chemicals etc., are valued at cost, computed on weighted average basis. Finished goods and work in
process are valued at cost or net realisable value, whichever is lower. in the case of finished goods and work in process cost comprises
of material, direct labour and applicable overhead expenses. the cost of finished goods also includes applicable excise duty.
E. INVESTMENTS (a) investments made by the company in various securities are primarily meant to be held over a long–term period.
(b) (i) holding of certain investments is of strategic importance to the company and therefore, the company does not consider
it necessary to provide for decrease in the Book Value of such investments, till continuation of the relationship of strategic
importance with the investee company, namely that of a Subsidiary, Associate, company under the same management, Foreign
Joint Ventures and/or company associated with Avantha Group.
(ii) however, appropriate provisions are made to recognise decrease in the Book Value of investments in companies of Strategic
importance also, as and when the investee company is either wound up or goes into liquidation or where the operations cease
or are taken over by Receiver by Operation of Law.
(c) investments in Government Securities are shown at cost and investments, other than that of Strategic importance to the company
are shown in the books at lower of cost or fair market value.
(d) As a conservative and prudent policy, the company does not provide for increase in the Book Value of individual investments held
by it on the date of Balance Sheet.
F. DIVIDEND provision for Dividend, as proposed by the Directors, is made in the books of account, pending approval of the Shareholders at the Annual
General Meeting.
G. FoREIGN CURRENCY TRANSACTIoNS (i) initial Recognition
Foreign currency transactions are recorded in indian rupees being the reporting currency, by applying to the foreign currency amount,
the exchange rate between the reporting currency and the foreign currency at the respective dates of the transaction.
(ii) conversion
Foreign currency monetary items are reported using the closing rate as at the year end. Non–monetary items which are carried in
terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.
(iii) exchange Differences
exchange differences arising on the settlement of monetary items or on reporting the company’s monetary items at rates different
from those at which they were initially recorded during the financial year are recognized as income or as expenses in the financial
year in which they arise except for adjustment of exchange difference arising on reporting of long term foreign currency monetary
items in so far they related to the acquisition of a depreciable capital assets which are adjusted to the cost of the assets.
H. REVENUE RECoGNITIoN As per the requirement of the companies (Amendment) Act, 1988, all expenses and income are accounted for on accrual basis.
I. RESEARCH & DEVELoPMENT Revenue expenditure on Research and Development is charged to the profit & Loss Account in the year in which it is incurred. capital
expenditure on Research and Development is shown as an addition to Fixed Assets or Work in progress, as the case may be.
ScheDuLeS “A” tO “M” attached to and forming part of the balance sheet
F inancials 59
J. RETIREMENT BENEFITS Short term employee benefits are charged off in the year in which the related services are rendered. post employment and other long term employee benefits are charged off in the year in which the employee has rendered services. the
amount charged off is recognized at the present value of the amount payable determined using actuarial valuation techniques. Actuarial gain and losses in respect of post employment and other long term benefits are charged to profit & Loss Accounts.
K. INCoME FRoM INVESTMENTS income from investments, where appropriate, is taken to revenue in full on declaration or receipt and tax deducted at source thereon is
treated as advance tax. L. ADVANCE LICENSE, IMPoRT ENTITLEMENTS Advance license ,import entitlements are recognized at the time of export and the benefit in respect of advance License received by the
company against export made by it are recognized as and when goods are imported against them. M. TAXATIoN provision for current tax is made on the basis of estimated taxable income for the relevant accounting year in accordance with the income
tax Act, 1961. the deferred tax liability on account of timing differences between the book profits and the taxable profits for the year is accounted by
applying the tax rates as applicable as on the balance sheet date. Deferred tax assets arising from timing differences are recognised on the principles of virtual certainty that these would be realised in
future. N. IMPAIRMENT oF ASSETS the company applies the test of impairment of certain assets as provided in Accounting Standard (AS) – 28 “impairment of Assets”. o. PRoVISIoN AND CoNTINGENCIES the company shall create a provision when there is a present obligation as a result of past events that probably require an outflow of
resources and a reliable estimate can be made of the amount of obligation. A disclosure for a contingent liability is made, when there is a possible obligation or a present obligation that probably will not require an outflow of resources or where a reliable estimate of the obligation cannot be made.
P. SHARE PREMIUM ACCoUNT: UTILISATIoN Debenture / Share / Zero coupon convertible Bonds issue expenses incurred and premium payable on Zero coupon convertible Bonds
are adjusted in the same year against the Securities premium Account as permitted by section 78(2) of the companies Act, 1956. 2. CoNTINGENT LIABILITIES a) Rs 9618 Lacs being claims (30th June 2009 Rs. 8254 Lacs) approximately against the company not acknowledge as debts. b) the details of disputed dues as per clause 9(b) of Section 227(4A) of the companies Act, 1956 are as follows:
Name of Statute Nature of dues Amount (Rs.in Lacs)
Forum where dispute is pending
central excise & tariff Act,1985 excise duty 861 Assessing Authority
1123 Appellate Authority
372 high court
central Sales tax Act ,1956 Sales tax 1573 Assessing Authority
and Sales tax Act of Various States
664 Appellate Authority
5 high court
custom Act, 1961 custom Duty 7 custom commissioner
Water (prevention and control of pollution) charges 8 hon’ble high court of Orissa
cess (Amendment) Act 2003
1 State pollution control Board of india
income tax Act,1961 income tax * 3147 hon’ble high court Nagpur Bench
Total 7761
* Appeals preferred by the department against appellate authority’s order
c) the future obligation for the rentals under a Financial Lease Agreement entered into, by the company for certain assets taken on lease by another company amounts to Rs. 2.07 Lacs (30th June, 2009 Rs. 6 Lacs).
3. Guarantees given by bankers on behalf of the company remaining outstanding and Bills Discounted with Banks remaining outstanding amount to Rs. 943.24 Lacs (30th June, 2009 Rs. 935.10 Lacs).
4. estimated amount of contracts remaining to be executed on capital Account Rs. 504.98 Lacs (Net of Advances) (30th June, 2009 Rs. 831.19 Lacs).
ScheDuLeS “A” tO “M” attached to and forming part of the balance sheet
ballarpur industries l imited • annual report 2009–1060
5. the company has operating leases for various premises and for other assets, which are renewable on a periodic basis and cancellable at its option. Rental expenses for operating leases charged to profit & Loss Account for the year are Rs. 43.17 Lacs (previous Year Rs. 38.49 Lacs). As of 30th June, 2010, the future minimum lease payments for non–cancellable operating leases are as below :–
– Not later than one year from 30th June, 2010 Rs. 17.58 Lacs – Later than one year and not later than five years Nil6. unit Ashti has imported certain plant and Machinery at concessional rate of custom duty under 5% export promotion capital Goods (epcG)
scheme. the unit has been granted two licenses, accordingly the unit is obliged to export goods amounting uSD$ 9.17 million, which is equivalent to eight and half times the duty saved on import of machinery. the unit is required to meet this export obligation over a period of eight years starting 17th March 2005. the unit has achieved total export of uSD 8.68 million as on 30.06.10. As such the liability that may arise for non–fulfillment of export obligation is currently non–ascertainable.
7. Disclosures required under the Micro, Small and Medium enterprises Development Act,2006 (“the Development Act”)–delayed payments due as at the end of the year on account of principal – Rs.128.27 (previous Year Rs. NiL) and interest due thereon 3 Lacs (previous Year Rs. NiL).
8. the disclosure required under Accounting Standard 15 ”employee Benefits” notified in the companies (Accounting Standards) Rules 2006, are given below:
Defined Contribution Plan: contribution to defined contribution plan is charged off for the year, are as under:
Sr. No
Particulars As at 30th June,2010(Rs. in Lacs)
As at 30th June,2009(Rs. in Lacs)
1. employer’s contribution in provident Fund 336.61 316.672. employer’s contribution in Superannuation Fund 52.65 49.613. employer’s contribution in pension Scheme 200.50 202.05
Defined Benefit Plan: the present value of obligation is determined based on actuarial valuation using projected unit credit Method, which recognizes each period
of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. the obligation for leave encashment is recognised in the same manner as gratuity.
Sr. No.
Particulars Gratuity (Unfunded)
(Rs. in Lacs)
Encashment(Unfunded)
(Rs. in Lacs)
Gratuity (Unfunded)
(Rs.in Lacs)
Encashment(Unfunded)
(Rs. in Lacs)2009–10 2009–10 2008–09 2008–09
a. Reconciliation of opening and closing of Defined Benefit obligation Defined benefit obligation at beginning of the year 2249.84 374.29 2159.90 389.46current Service cost 184.31 24.74 170.77 16.32interest cost 186.14 29.62 165.35 28.60Actuarial (gain)/loss 182.15 83.01 65.22 56.42Benefit paid (251.68) (79.39) (311.40) (116.51)plan Amendments 163.10 – – –Defined benefit obligation at year end 2713.86 432.27 2249.84 374.29
b. Reconciliation of opening and closing balance of fair value of plan assetsFair value of plan assets at beginning of the year – – – –expected return on plan assets – – – –Actuarial gain/ (loss) – – – –employer contribution 251.68 79.39 311.4 116.51Benefit paid (251.68) (79.39) (311.4) (116.51)Fair Value of plan assets at year end – – – –Actual return on plan assets – – – –
c. Reconciliation of fair value of assets and obligationsFair value of plan assets as at 30th June, 2010present value of obligation as at 30th June, 2010 2713.86 432.27 2249.84 374.29Amount recognized in Balance Sheet 2713.86 432.27 2249.84 374.29
d. Expenses recognized during the year(under the head “payments to and Provisions for Employees”)current Service cost 184.31 24.74 170.77 16.32interest cost 186.14 29.62 165.35 28.60expected return on plan assets – –Actuarial (gain)/loss 182.15 83.01 65.22 56.42plan Amendments 163.10 – – –Net cost 715.70 137.37 401.34 101.34
e. Discount rate (per annum) 7.50% 7.50% 7.50% 7.50%expected rate of return on plan assets (per annum)
ScheDuLeS “A” tO “M” attached to and forming part of the balance sheet
F inancials 61
Rate of escalation in salary considered in actuarial valuation, taken into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. the above information is certified by the actuary.
9. MISCELLANEoUS EXPENDITURE – DEFERRED REVENUE EXPENDITURE compensation paid under the Approved Voluntary Retirement Scheme for its employees have been treated as Deferred Revenue expenditure,
which was being written off over a period of five years or up to 31st March 2010, whichever is earlier. 10. the provision for taxation for the year is the aggregate of the provision made for nine months ended 31.03.10 and three months ended 30.06.10.
the ultimate tax liability shall however be based on the previous year as defined in the income tax Act,1961. the deferred tax Assets and Liabilities as on 30.06.10 and 30.06.09 comprising timing difference on accounts of :–
Particulars 30.06.10(Rs. In Lacs)
30.06.09(Rs. In Lacs)
Deferred Tax Asset
expenses allowable on payment basis 219.24 216.11
provision for Gratuity & Others 1048.41 891.94
Total 1267.65 1108.05
Deferred Tax Liability
higher Depreciation Allowed under tax Laws (Net of unabsorbed Depreciation) 11354.78 10777.55
Others including Deferred Revenue expenditure – 17.63
Total 11354.78 10795.18
Net Deferred Tax Liability 10087.13 9687.13
11. construction and installation in progress and Advances against capital Assets include expenses and interest related to ongoing projects at various units of the company.
12. the company has entered into a power purchase Agreement with Avantha power & infrastructure Limited and the rates of purchase of power and steam have been agreed periodically as per the terms of the agreement.
13. Accounts with certain Financial institutions, Banks and companies are subject to reconciliation; however these will not have any significant impact on the profit for the year and on the net worth of the company as on the Balance Sheet date.
14. Figures for the previous year have been rearranged and regrouped, wherever necessary to conform to current year’s classification. Signature to schedules “A” to “M”
As per our report attachedDINESH KUMAR BACHCHASPartner Membership No. 097820For and on behalf ofK. K. MANKESHwAR & Co.Chartered AccountantsFRN: 106009W
New Delhi, dated the19th August, 2010
GAutAM thApARchairmanR. R. VeDeRAhmanaging directorB. hARihARANgroup director (finance)ViVeK KuMAR GOYALchief financial officerAKhiL MAhAJANcompany secretary
New Delhi, dated the19th August, 2010
ScheDuLeS “A” tO “M” attached to and forming part of the balance sheet
ballarpur industries l imited • annual report 2009–1062
All Amount in indiAn Rupees thousAnds except shARe dAtA
30.06.2010 30.06.2009
SCHEDULE "I": SALES
Paper (Including Paper Products and Office Supplies) 11,002,627 10,742,881
Less: Discount 411,495 207,203
10,591,132 10,535,678
10,591,132 10,535,678
SCHEDULE "II" : OTHER INCOME
Interest on Investments 126 133
Profit on Sales of Stores, Raw Materials, Scrap etc. 18,950 20,208
Rent and License Fee (Gross) 120 120
Profit on sale of investment 24,160
Miscellaneous Income 12,181 11,622
Gain arising on Buyback of Zero Coupon Convertible Bonds – 17,420
Foreign Currency Fluctuation (Net) 7,558 –
Profit on Sale of Assets (Net) 100 –
63,195 49,503
SCHEDULE "III": INCREASE/(DECREASE) IN STOCKS
Opening Stock :
Finished 535,329 367,847
In Process 79,798 33,260
615,127 401,107
Closing Stock :
Finished 556,450 535,329
In Process 93,097 79,798
649,547 615,127
Net Increase/(Decrease) on Stocks 34,420 214,020
SCHEDULE "IV": MANUFACTURING COSTS
Raw Materials consumed (including Expenses thereon) 3,121,661 2,998,965
Stores and Spare Parts consumed 1,436,313 1,739,295
Excise duty on year end inventory of Finished Goods (388) (278)
Power, Fuel and Water Charges 1,666,522 1,510,526
Repairs and Maintenance - Buildings 16,504 13,367
Repairs and Maintenance - Plant & Machinery 211,293 81,415
Repairs and Maintenance Sundries 11,160 9,141
Processing Charges 76,561 102,045
Other Expenses 26,738 20,586
6,566,364 6,475,062
SCHEDULE "V": PERSONNEL COSTS
Salaries, Wages, Bonus and Gratuity 583,672 515,354
Directors' Commission on Profits -Gross 21,859 26,016
Contribution to Provident, Superannuation & Other Funds 40,784 37,344
Workers and Staff Welfare Expenses 51,276 39,250
697,591 617,964
SChEDuLES “I” TO “VIII” attached to and forming part of the profit & loss account for the year ended june 30, 2010
F inancials 63
30.06.2010 30.06.2009
SCHEDULE "VI": ADMINISTRATION, SELLING & MISCELLANEOUS COSTS (Rs. “000”) (Rs. “000”)
Rent 2,428 1,769
Lease Rent 1,889 2,080
Rates and Taxes 6,176 6,986
Insurance Charges 17,195 13,322
Directors Fees 1,320 1,400
Debenture Trustee Remuneration 317 364
Office & Other Expenses (Including Rs. 2119 thousands for Research and Development) 150,855 86,746
Carriage and Freight 227,241 172,712
Other Selling Expenses 102,285 69,125
Loss on Sale of Assets (Net) – 8
Foreign Currency Fluctuation (Net) – 9,890
509,706 364,402
Less: unspent Liabilities and excess provisions in respect of earlier years written back 4,661 3,771
505,045 360,631
SCHEDULE "VII": INTEREST AND FINANCE COSTS
Interest :
On Debentures and Fixed Loans 255,789 294,336
On Other Accounts 173,802 147,911
Finance and Placement Charges 40 47
Guarantee Commission paid to Banks 848 971
430,479 443,265
Less: Interest earned (Tax deducted at source Rs.17014 Thousands) 207,253 305,499
223,226 137,766
SCHEDULE "VIII" : ADDITIONAL INFORMATION PURSUANT TO THE PROVISIONS OF PARAGRAPH (3) TO (4D) OF PART II OF SCHEDULE VI OF COMPANIES ACT, 1956 TOGETHER WITH OTHER NOTES.
1. Particulars in respect of goods Manufactured and Installed Capacities:
Class of Goods Unit INSTALLED CAPACITY ACTUAL PRODUCTION
(ANNUAL) (ANNUAL)
30.06.2010 30.06.2009 30.06.2010 30.06.2009
Paper including Wrapper M.T. 232,068 232,068 206,313 207,544
and Coated Paper
a) the installed capacity is as certified by the management and license capacity is not given as licensing is not applicable.
b) includes production 9263 mt (previous Year 9007 mt) of coated paper at unit shreeGopal converted out of the paper manufactured by company .
c) includes production 5411 mt (previous Year 4915 mt) of paper stationery converted out of the paper manufactured by company .
d) the installed capacity and Actual production of paper & wrapper includes specialised Grades of paper.
SChEDuLES “I” TO “VIII” attached to and forming part of the profit & loss account for the year ended june 30, 2010
ballarpur industries l imited • annual report 2009–1064
30.06.2010 Value
30.06.2009 Value
(Rs. “000”) (Rs. “000”)
2 Particulars in respect of Purchases, Stock of Finished Goods and Sales:
(a) Purchases
Purchases 566,741 432,620
(b) Stock of Finished Goods and Sales Amount (Rs. “000”)
Class of Goods Unit
of Qty.
OPENING STOCK CLOSING STOCK SALES
30.06.2010 30.06.2009 30.06.2010 30.06.2009 30.06.2010 30.06.2009
Quantity Value Quantity Value Quantity Value Quantity Value Quantity Value Quantity Value
paper (including m.t. 1,363 52,720 1,236 46,602 747 30,417 1,363 52,720 201,518 9,674,391 202,502 10,230,164
Wrapper and
coated paper )
others including – 482,609 – 321,245 – 526,033 – 482,609 – 916,741 – 305,514
office supplies
535,329 367,847 5 56,450 535,329 10,591,132 10,535,678
3. Analysis of Materials consumed
Unit Quantity Amount (Rs."000")
30.06.2010 30.06.2009 30.06.2010 30.06.2009
Bamboo M.T. 137,072 90,570 445,863 315,724
Wood and Wood species M.T. 316,694 370,167 935,969 979,628
Wood Pulp M.T. 59,380 56,246 1,685,321 1,640,409
Others 54,508 63,204
513,146 516,983 3,121,661 2,998,965
4. Value of Imports on C.I.F. Basis:
30.06.2010 30.06.2009
(Rs. “000”) (Rs. “000”)
a) Raw Materials 900,043 549,735
b) Components, Spare Parts and other Stores 127,502 520,568
c) Others 50,288 47,685
1,077,833 1,117,988
Note : imported Raw material procured from canalising agencies have been considered as indigenous.
SChEDuLES “I” TO “VIII” attached to and forming part of the profit & loss account for the year ended june 30, 2010
F inancials 65
8. Particulars of amount remitted during the year in Foreign Currencies on account of Dividends, the number of non-resident Shareholders together with the number of Shares held by them on which the Dividends were due and the year to which the Dividends related.
Year to Which
Dividend Relates
Number of Non-Resident Shareholders to whom
Dividends remitted during the year
Number of Shares held by them
Amount (Rs."000")
Current Year Previous Year Current Year Previous Year Current Year Previous Year
Class of Shares:
Equity Final 2007-08 Three 5,723,025 4,006
Final 2008-09 Three 5,723,025 2,862
7. Value of Imported raw materials, spare parts and components (excluding stores) consumed and the value of all indigenous raw materials, spare parts and components (excluding stores) similarly consumed and the percentage of each to the total consumption.
Amount Percentage
Current Year Previous Year Current Year Previous Year
(Rs. “000”) (Rs. “000”) (%) (%)
A) Raw Materials
- Imported 838,583 743,831 26.86 24.80
- Indigenous 2,283,078 2,255,134 73.14 75.20
3,121,661 2,998,965 100.00 100.00
B) Spare Parts and Components
- Imported 32,572 101,370 14.28 11.84
- Indigenous 195,448 754,599 85.72 88.16
228,020 855,969 100.00 100.00
Notes:
i) consumption of Raw material, components & spare parts includes estimated values of stocks brought forward from earlier year.
ii) consumption of imported items purchased from canalising agencies have been considered as indigenous items.
5. Expenditure in Foreign Currency
30.06.2010 30.06.2009
(Rs. “000”) (Rs. “000”)
i) Foreign Travel, Commission, Claims, Consultancy Fees, 22,718 51,923
Deferred payment Instalments, Subscriptions etc.
ii) Interest on Foreign Currency Loans 53,849 124,718
76,567 176,641
6. Earnings in Foreign Exchange on Cash Basis;
a) F.O.B. Value of Exports 204,988 96,874
b) Interest on loan 53,602 212,671
c) Others 6,621
265,211 309,545
SChEDuLES “I” TO “VIII” attached to and forming part of the profit & loss account
ballarpur industries l imited • annual report 2009–1066
30.06.2010 30.06.2009 (Rs. “000”) (Rs. “000”)
9. Expenses / costs incurred on exploitation and procurement of forests based raw materials, Lime Kiln, Water Works and those for own Departmental transport charged in these accounts include the following :- Salaries and Wages 3,343 2,971 Contribution to Provident and Other Funds 268 251 Rent, Rates and Taxes (incl. Lease Rent) 73 160 Staff Welfare 118 127 Repairs and Maintenance - Others 8 9 Office and Other Expenses 298 237
4,108 3,755
10. Statement showing computation of Net Profits in accordance with Section 198 read with Section 309(5) of the Companies Act,1956 Profit as per Profit & Loss Account before Taxation 874,035 1,422,273 Less : Profit/ (Loss) on Sale of assets (Net) 100 (8)Depreciation 833,743 769,544
40,192 652,737 Add back :- Directors Fee 1,320 1,400 Remuneration paid/payable to Chairman, Managing Director 80,527 70,583 and other Directors Profit Commission to Chairman 18,738 22,804 Depreciation under Section 350 of the Companies Act, 1956 833,743 769,544 Commission to other Directors 3,121 3,212
937,449 867,543 Profit Under Section 198 : 977,641 1,520,280 Remuneration under Section 198 @ 11% of above 107,541 167,231 Amount of Profit Commission as approved by Board - to be shared as under : Chairman 18,738 22,804 Other Directors 3,121 3,212
21,859 26,016 Actual remuneration including Commission & Perquisites 102,386 96,599
11. Remuneration paid / payable to Chairman, Managing Director and Directors: Salary (Including Commission of Rs 21859 thousands) 90,206 82,866 (Previous Year Rs. 26016 thousands) Payable both to Executive & Non Executive Directors Contribution to Provident and Superannuation Funds 4,810 4,594 Perquisites 7,370 9,139
102,386 96,599Having regard to the fact that there is a global computation of Gratuity, the amount applicable to an individual employee is not ascertainable and accordingly, contribution to Gratuity
has not been considered in the above computation.
30.06.2010 30.06.2009 (Rs. “000”) (Rs. “000”)
12. Amount paid/payable to Auditors Audit Fee (Including Cost Audit Fee of Rs 91 Thousands) 3,413 3,403 In Other Capacity 5,593 3,744 Out of Pocket Expenses 921 439
9,927 7,586
13. Depreciation charged for the year and debited to the Profit & Loss Account includes Rs. 14653 thousands (Previous Year 33482 thousand) being depreciation on the revalued portion of Fixed Assets, since the Revaluation Reserve stood exhausted in the earlier years.
SChEDuLES “I” TO “VIII” attached to and forming part of the profit & loss account
F inancials 67
14. Segment Reporting
The Company has identified business segment as the primary segment after considering all the relevant factors. The Company's manufactured products are sold primarily within India and as such there are no reportable geographical segment. The Expenses, which are not directly identifiable to a specific business segment are clubbed under “unallocated Corporate Expenses” and similarly, the common assets and liabilities, which are not identifiable to a specific segment are clubbed under “unallocated Corporate Assets/ Liabilities" on the basis of reasonable estimates.
Amount (Rs. “000”)
Particulars Year Paper Paper Products &
office supplies
Others Total
Revenues
Gross sale to External Customers 2009-10 6,684,354 3,906,778 – 10,591,132
Excise Duty 2009-10 (266,603) (118,750) – (385,353)
Gross sale to External Customers 2008-09 7,358,443 3,177,235 – 10,535,678
Excise Duty 2008-09 (384,064) (158,304) – (542,368)
Total Segment Revenues (Net Of Excise Duty) 2009-10 6,417,751 3,788,028 – 10,205,779
2008-09 6,974,379 3,018,931 – 9,993,310
Segment Results 2009-10 919,800 273,874 – 1,193,674
2008-09 1,351,255 318,333 – 1,669,588
Less: unallocated Corporate Expenses 2009-10 96,413
(Net of other income) 2008-09 109,549
Profit Before Interest, Tax and Exceptional items 2009-10 1,097,261
2008-09 1,560,039
Interest (Net of Income) 2009-10 223,226
2008-09 137,766
Profit Before Tax and Exceptional items 2009-10 874,035
2008-09 1,422,273
Provision For Tax
– Current Tax (Net of MAT Entitlement Credit) 2009-10 251,201
2008-09 107,185
– Deferred Tax 2009-10 40,000
2008-09 52,535
– Fringe Benefit Tax 2009-10 –
2008-09 8,700
Net Profit 2009-10 582,834
2008-09 1,253,853
Other Information
Segmental Assets 2009-10 23,845,317 3,955,464 133,102 27,933,883
2008-09 20,060,173 3,610,138 133,102 23,803,413
unallocated Corporate assets 2009-10 3,448,654
2008-09 3,274,557
Total Assets 2009-10 31,382,537
2008-09 27,077,970
Segmental Liabilities 2009-10 3,138,441 607,894 585,802 4,332,137
2008-09 1,882,296 513,294 585,802 2,981,392
unallocated Corporate Liabilities 2009-10 907,855
2008-09 733,704
Total Liabilities 2009-10 5,239,992
2008-09 3,715,096
SChEDuLES “I” TO “VIII” attached to and forming part of the profit & loss account
ballarpur industries l imited • annual report 2009–1068
All Amount in indiAn Rupees thousAnds except shARe dAtA
Capital Expenditure during the period 2009-10 1,005,502
(Including Movements in CWIP & Capital Advances) 2008-09 2,635,496
Depreciation & Impairment 2009-10 833,743
2008-09 769,544
Amortisation 2009-10 36,649
2008-09 40,973
Total Liabilities Excludes
Secured Loans 2009-10 3,864,525
2008-09 5,090,402
unsecured Loans 2009-10 4,756,292
2008-09 3,806,037
Deferred Tax Liabilities 2009-10 1,008,713
2008-09 968,713
Particulars Year Paper Paper Products &
office supplies
Others Total
15. Information on Related Parties as required by Accounting Standard -18 “Related Party Disclosures”. i. List of Related Parties over which control exists Subsidiary Companies Ballarpur International holdings B.V. Ballarpur Paper holdings B.V.* Sabah Forest Industries Sdn. Bhd.* BILT Tree Tech Limited BILT Graphic Paper Products Limited* Ballarpur International Paper holdings B.V.* Ballarpur International Graphic Paper holdings B.V. Ballarpur Speciality Paper holdings B.V. Ballarpur Packaging holdings B.V. Ballarpur International Packaging holdings B.V. Ballarpur Packaging holdings Private Limited * Step Down subsidiaries of Ballarpur International holdings B.V.
ii. Name of the related Parties with whom transactions were carried out during the year and nature of Relationship Subsidiary Companies Ballarpur Paper holdings B.V.* Sabah Forest Industries Sdn. Bhd.* BILT Tree Tech Limited BILT Graphic Paper Products Limited* Ballarpur Speciality Paper holdings B.V. Ballarpur Packaging holdings B.V. * Step Down subsidiaries of Ballarpur International holdings B.V.
Enterprise in which Key Management Personnel has significant influence APR Sacks Limited ASA Agencies (P) Limited Asia Aviation Limited Avantha holdings Limited (formerly known as NewQuest Corporation Limited) Avantha Power & Infrastructure Limited Avantha Realty Limited (formerly known as Janpath Investments and holdings Limited) Avantha Technologies Limited (earlier NewQuest Process Outsourcing Private Limited) Bilt Industrial Packaging Company Limited Biltech Building Elements Limited Crompton Greaves Limited
SChEDuLES “I” TO “VIII” attached to and forming part of the profit & loss account
F inancials 69
All Amount in indiAn Rupees thousAnds except shARe dAtA
Global Green Company Limited Imerys Newquest (India) Private Limited Krebs & Cie (India) Limited Mirabelle Trading Pte. Limited Salient Business Solutions Ltd. Solaris Chemtech Industries Limited (earlier Solaris Bio Chemicals Ltd.) Solaris holdings Ltd. The Paperbase Company Limited uhL Power Company Limited
Key Management Personnel Mr. Gautam Thapar Mr. R.R. Vederah Mr. B. hariharan Mr. Yogesh Agarwal III. Detail of transactions with related parties : (Financial Transactions have been carried out in the ordinary course of business and/or in discharge of contractual obligation)
Sl. No.
Particulars 30.06.2010Rs. “000”
30.06.2009Rs. “000”
a. Sales of goods, rent received & allocation of common expenses for rendering corporate service:
– Other Related Parties 5,952 5,873
b. Purchase of goods & service :
– Step Down Subsidiary Company 6,04,797 7,61,371
– Other Related Parties 12,75,269 15,91,387
c. Investment made during the year:
– Other Related Parties – 1,99,108
– Subsidiary Companies 87,59,719
– Step Down Subsidiary Company 2,328 –
d. Sale of Investment:
– Step Down Subsidiary Company 1,31,403 1,99,108
e. Refund of Advances:
– Subsidiary Companies – 15,12,900
f Interest on Loan Given:
– Subsidiary Companies 1,36,102 212,671
g. Advances Against Equity :
– Subsidiary Companies 126 21,19,265
h. Advances given:
– Subsidiary Companies 10,764 10,619
i. Remuneration
Key Management Personnel 1,35,553 1,16,314
j. Outstanding balances as at 30th June,2010:
– Subsidiary Companies- Loans & Advances 1,55,737 42,80,886
– Subsidiary Companies- Advance against investment 126 21,19,265
– Step Down Subsidiary Companies - Loans & Advances – 2,05,151
– Other Related Parties - Loans, Advances & Debtors 6,34,214 7,66,807
– Key Management Personnel - Advances 2,831 3,162
SChEDuLES “I” TO “VIII” attached to and forming part of the profit & loss account
ballarpur industries l imited • annual report 2009–1070
All Amount in indiAn Rupees thousAnds except shARe dAtA
30.06.2010Rs. “000”
30.06.2009Rs. “000”
16. Earnings Per Share
I Profit Computation for both Basic and Diluted Earnings
Per Share of Rs. 2/- each
Net Profit after Tax as per Profit & Loss Account 582,834 1,253,853
Net Profit after Tax available to Equity Shareholders For Basic EPS 582,834 1,253,853
Adjustment for the purpose of Diluted EPS :-
Net Profit available to Equity Shareholders For Diluted EPS 582,834 1,253,853
II Weighted Average number of Equity Share for Earnings Per
Share Computation
A) No. of shares for Basic Earnings Per Share 571,606,031 555,523,839
Add: Effect of potential equity shares on conversion of Zero Coupon Convertible Bonds 64,322,070 64,322,070
B) No. of Shares for Diluted Earnings Per Share 635,928,101 619,845,909
III Earnings Per Share
Basic (Rs.) 1.02 2.26
Diluted (Rs.) 0.92 2.02
17. The aggregate value of Stores and Spare Parts consumed during the year amounts to Rs. 1313502 thousands (Previous Year Rs. 1791136 thousands) which were charged to various account heads including capital expenditure.
18. Figures for the previous year have been rearranged and regrouped, wherever necessary to conform to Current year's classification.
Signatures to Schedules 'I' to 'VIII"
As per our report attachedDINESH KUMAR BACHCHASPartner Membership No. 097820For and on behalf ofK. K. MANKESHWAR & CO.Chartered AccountantsFRN: 106009W
New Delhi, dated the19th August, 2010
GAuTAM ThAPARchairmanR. R. VEDERAhmanaging directorB. hARIhARANgroup director (finance)VIVEK KuMAR GOYALchief financial officerAKhIL MAhAJANcompany secretary
New Delhi, dated the19th August, 2010
SChEDuLES “I” TO “VIII” attached to and forming part of the profit & loss account
F inancials 71
Balance Sheet Abstract & Company’s General Business ProfileI. Registration details
Registration No. 1 0 3 3 7 State Code : 1 1 Balance Sheet Date : 3 0 0 6 2 0 1 0 Date Month Year
II. Capital raised during the year : (Amount in Rs. thousands)
Public Issue : N I L Rights Issue : N I L Bonus Issue : N I L Private Placement : 2 0 0 0 0 0
III. Position of mobilisation and deployment of funds : (Amount in Rs. thousands)
Total Liabilities : 2 6 1 4 2 5 4 5 Total Assets : 2 6 1 4 2 5 4 5
Sources of funds : Paid-up Capital : 1 3 1 1 2 3 4 Reserves & Surplus : 1 5 2 0 1 7 8 1 Secured Loans : 3 8 6 4 5 2 5 unsecured Loans : 4 7 5 6 2 9 2 Deferred Tax Liability (Net) : 1 0 0 8 7 1 3
Application of funds : Net Fixed Assets : 1 0 6 0 0 5 6 0 Investments : 1 1 5 1 0 2 7 5 Net Current Assets : 4 0 3 1 7 1 0 Misc. Expenditure : N I L Accumulated Losses : N I L
IV. Performance of Company : (Amount in Rs. thousands) Turnover & Other Revenues : 1 0 2 6 8 9 7 4 Total Expenditure : 9 3 9 4 9 3 9 Profit before Tax : 8 7 4 0 3 5 Profit after Tax : 5 8 2 8 3 4 Basic Earnings per share in Rs.: 1 . 0 2 Dividend Rate (%) : 2 5
V. Generic names of the three principal products / services of the Company Item Code No. (ITC Code) 4 8 1 0 . 0 0 0 Product Description P A P E R
ADDITIONAL INFORMATION PURSUANT TO THE PROVISIONS OF PART-IV OF SCHEDULE VI OF COMPANIES ACT, 1956
As per our report attachedDINESH KUMAR BACHCHASPartner Membership No. 097820For and on behalf ofK. K. MANKESHWAR & CO.Chartered AccountantsFRN: 106009W
New Delhi, dated the19th August, 2010
GAuTAM ThAPARchairmanR. R. VEDERAhmanaging directorB. hARIhARANgroup director (finance)VIVEK KuMAR GOYALchief financial officerAKhIL MAhAJANcompany secretary
New Delhi, dated the19th August, 2010
ballarpur industries l imited • annual report 2009–1072
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ballarpur industries l imited • annual report 2009–1074
To,The Board of DirectorsBallarpur Industries Limited
1. We have audited the attached Consolidated Balance Sheet of Ballarpur Industries Limited (‘The Company’) and its subsidiaries as at 30th June, 2010, the Consolidated Profit and Loss Account and the Consolidated Cash Flow Statement for the year on that date, annexed there to.
2. These financial statements are the responsibility of the Company’s Management. Our responsibility is to express an opinion on these financial statements based on our audit. We have conducted our audit in accordance with generally accepted auditing standards in India. These Standards require that we plan and perform the audit to obtain reasonable assurance whether the financial statements are prepared, in all material respects, in accordance with an identified financial reporting framework and are free of material misstatements. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by Management, as well as evaluating the overall financial statements. We believe that our audit provides a reasonable basis for our opinion.
3. We report that the Consolidated Financial Statements have been prepared by the Company in accordance with the requirements of Accounting Standard (AS) 21, Consolidated Financial Statements and Accounting Standard (AS) 23, Accounting for Investment in Associates in Consolidated Financial Statements, issued by the Institute of Chartered Accountants of India and on the basis of the separate audited financial statements of Company, its subsidiaries and associate included in the Consolidated Financial Statements.
4. In our opinion and to the best of our information and according to the explanations given to us and on consideration of the separate audit reports on individual audited financial statements of the Company and its subsidiaries and subject to the remarks set out in foregoing paragraphs, the said Consolidated Financial statements, read together with the Notes thereon give a true and fair view:
(a) in the case of the Consolidated Balance Sheet, of the consolidated state of affairs of the Company and its subsidiaries as at 30th June, 2010.
(b) in the case of the Consolidated Profit and Loss Account, of the consolidated results of operations of the Company and its subsidiaries for the year ended on that date; and
(c) in the case of the Consolidated Cash Flow Statement, of the consolidated cash flows of the Company and its subsidiaries for the year ended on that date.
DINESH KUMAR BACHCHASPartner Membership No. 097820For and on behalf ofK. K. MANKESHwAR & Co.Chartered AccountantsFRN: 106009W
New Delhi, dated the19th August, 2010
AuDITORS' RePORT ON CONSOLIDATeD FINANCIAL STATeMeNTS
Consol idated F inanCials 75
As per our report attachedDINESH KUMAR BACHCHASPartner Membership No. 097820For and on behalf ofK. K. MANKESHwAR & Co.Chartered AccountantsFRN: 106009W
New Delhi, dated the19th August, 2010
GAuTAM ThAPARchairmanR. R. VeDeRAhmanaging directorB. hARIhARANgroup director (finance)VIVeK KuMAR GOYALchief financial officerAKhIL MAhAJANcompany secretary
New Delhi, dated the19th August, 2010
All Amount in indiAn Rupees thousAnds except shARe dAtA
Schedule 30.06.2010 30.06.2009 I. SoURCES oF FUNDS1. SHAREHoLDERS' FUNDS(a) Share Capital "A" 1,311,234 1,111,234
(b) Reserves & Surplus "B" 21,122,658 17,192,165
22,433,892 18,303,399
2. MINoRITY INTEREST 4,110,206 3,676,085
3. LoAN FUNDS(a) Secured Loans "C" 20,633,430 28,257,090
(b) unsecured Loans "D" 15,282,785 8,881,551
35,916,215 37,138,641
4. DEFERRED TAX LIABILITY (Net of Assets) 1,914,255 1,778,143
Total 64,374,568 60,896,268
II. APPLICATIoN oF FUNDS1. FIXED ASSETS(a) Gross Block "e" 76,075,559 65,260,543
Less: Depreciation & Impairment 25,015,184 21,399,701
Net Block 51,060,375 43,860,842
(b) Construction and Installation-in-Progress
including expenditure thereon (Pending allocation) 2,835,936 8,022,371
(c) Advance against Capital Assets 403,738 551,879
54,300,049 52,435,092
2. INVESTMENTS "F" 405,629 381,479
3. CURRENT ASSETS, LoANS & ADVANCES(a) Interest accrued on Investments 6,323 931
and Fixed Deposits (Net)
(b) Inventories "G" 7,692,660 4,861,303
(c) Sundry Debtors "h" 4,605,307 3,260,094
(d) Cash and Bank Balances "I" 2,416,772 1,043,233
(e) Loans and Advances "J" 10,189,036 7,786,474
24,910,098 16,952,035
LESS: CURRENT LIABILITIES AND PRoVISIoNS "K"
(a) Current Liabilities 11,625,337 6,067,639
(b) Provisions 3,625,862 3,012,537
15,251,199 9,080,176
Net Current Assets 9,658,899 7,871,859
4. MISCELLANEoUS EXPENDITURE "L" 9,991 207,838
(to the extent not written off or adjusted)
NoTES To BALANCE SHEET "VIII"
Total 64,374,568 60,896,268
Note: Schedules "A" to "L" & "VIII" referred to above form an integral part of the Balance Sheet.
CONSOLIDATeD BALANCe SheeT as at june 30, 2010
ballarpur industries l imited • annual report 2009–1076
As per our report attachedDINESH KUMAR BACHCHASPartner Membership No. 097820For and on behalf ofK. K. MANKESHwAR & Co.Chartered AccountantsFRN: 106009W
New Delhi, dated the19th August, 2010
GAuTAM ThAPARchairmanR. R. VeDeRAhmanaging directorB. hARIhARANgroup director (finance)VIVeK KuMAR GOYALchief financial officerAKhIL MAhAJANcompany secretary
New Delhi, dated the19th August, 2010
Schedule 30.06.2010 30.06.2009 INCoMESales "I" 38,964,062 29,436,497 Less: excise Duty 1,018,110 1,189,575 Net Sales 37,945,952 28,246,922 Other Income "II" 238,556 131,790
Increase / (Decrease) in Stocks "III" 129,152 474,453
Total 38,313,660 28,853,165 EXPENDITUREManufacturing Costs "IV" 25,522,297 18,696,518 Purchases 566,700 417,648 Personnel Costs "V" 2,482,893 2,191,230 Administration, Selling & Miscellaneous Costs "VI" 1,360,496 886,491 Deferred Revenue expenditure - Amortised (Net) 197,847 103,710 Interest and Finance Costs (Net) "VII" 2,371,088 1,708,196 Depreciation & Impairment 3,018,853 2,325,531 Total 35,520,174 26,329,324 Profit Before Taxation 2,793,486 2,523,841 Provisions for Taxation Current Tax/MAT 472,192 310,214 MAT entitlement Credit (219,028) (194,944) Deferred Tax 136,112 513,469 Fringe Benefits Tax – 16,325
389,276 645,064 Profit After Taxation 2,404,210 1,878,777 Less: excess Provision for Taxation relating to earlier Years 148 – Less: Minority Interest 434,121 211,640
1,969,941 1,667,137 Add: Share of Profit in Associate – 15,800 Add: Balance brought forward from last year 4,965,216 4,040,883 Add :Debenture Redemption Reserve no longer required 75,000 75,000 Less : Adjustment for change in holding of subsidiary / – 258,636 associate companyAmount available for Appropriation 7,010,157 5,540,184 APPRoPRIATIoNSGeneral Reserve 150,000 250,000 Proposed Dividend:On 655523839 equity Shares @ 25% 327,762 – (On 555523839 equity Shares @ 25%) – 277,762
327,762 277,762 Add: Dividend Tax on above 54,437 382,199 47,206 324,968Balance carried to Balance Sheet 6,477,958 4,965,216 NOTeS FORMING PART OF PROFIT & LOSS ACCOuNT "VIII"
7,010,157 5,540,184 BASIC eARNINGS PeR ShARe (Rs.) 3.45 3.03 DILuTeD eARNINGS PeR ShARe (Rs.) 3.11 2.72
All Amount in indiAn Rupees thousAnds except shARe dAtA
CONSOLIDATeD PROFIT & LOSS ACCOuNT for the year ended june 30, 2010
Consol idated F inanCials 77
All Amount in indiAn Rupees thousAnds except shARe dAtA
Notes
1. the above statement has been prepared following the indirect method.
2. increase in Fixed assets are stated inclusive of movements of Capital work in progress and Capital advances between the beginning and the end of the year.
3. proceeds from long term and other borrowings are shown net of repayments.
4. Cash and Cash equivalents represent Cash and bank balances only.
5. Figures of previous year have been rearranged and regrouped wherever necessary to conform to current year classifications.
As per our report attachedDINESH KUMAR BACHCHASPartner Membership No. 097820For and on behalf ofK. K. MANKESHwAR & Co.Chartered AccountantsFRN: 106009W
New Delhi, dated the19th August, 2010
GAuTAM ThAPAR chairmanR. R. VeDeRAh managing directorB. hARIhARAN group director (finance)VIVeK KuMAR GOYAL chief financial officerAKhIL MAhAJAN company secretary
New Delhi, dated the19th August, 2010
Particulars 30.06.2010 30.06.2009 A. CASH FLow FRoM oPERATING ACTIVITIESNet Profit Before Tax and Appropriations 2,793,486 2,523,841 Add /(Less) :
Adjustments for :(Profit) / Loss on Sale of Assets (Investing Activity) (1,667) (5,027)
unspent Liabilities and excess Provisions of earlier years written back (11,705) (29,472)
Assets discarded 5,346 41
Interest and Finance Costs (net) 2,371,088 1,708,196
Depreciation & Impairment 3,018,853 2,325,531
Deferred revenue expenses amortised 197,847 103,710
Bad debts and claims written off 18,636 –
operating Profit before working Capital changes 8,391,884 6,626,820
Adjustments for working Capital changes :Trade payable and others 5,429,651 (203,913)
Inventories (2,803,046) 155,945
Trade and other receivables (1,363,849) (133,468)
Loans and Advances (1,611,383) 103,703
Cash generated from operations 8,043,257 6,549,087
Deferred Revenue expenditure (net) – (231,941)
Direct Taxes (net) (572,151) (535,489)
NET CASH INFLow FRoM oPERATING ACTIVITIES 7,471,106 5,781,657
B. CASH FLow FRoM INVESTING ACTIVITIESIncrease in Fixed Assets ,Capital WIP, Capital Advances (Net) (4,472,087) (13,727,655)
Sale of assets ( Net) 2,100 432,662
Subscription / Purchase of Investment (Net of Redemption) (24,150) (199,014)
NET CASH USED IN INVESTING ACTIVITIES (4,494,137) (13,494,007)
C. CASH FLow FRoM FINANCING ACTIVITIESProceeds from Issuance / (Repayment) of Share Capital (net) 1,350,000 –
Payment for buy-back compulsory and optional (688) (2,945)
Proceeds from issuance of unsecured zero coupon compulsory convertible bonds 1,650,000 –
Increase / (Decrease) in long term and other borrowings (net) (1,222,426) 8,339,614
Interest and Financing Charges (net) (2,327,110) (1,712,626)
Dividend Paid (including dividend tax) (326,002) (455,648)
NET CASH USED IN FINANCING ACTIVITIES (876,226) 6,168,395 NET INCREASE IN CASH AND CASH EQUIVALENTS [A+B+C] 2,100,743 (1,543,955)IMPACT oF FoREIGN CURRENCY TRANSLATIoN RESERVE (727,204) (2,295,627)CASH AND CASH EQUIVALENTS (oPENING BALANCE) 1,043,233 4,882,815
CASH AND CASH EQUIVALENTS (CLoSING BALANCE) 2,416,772 1,043,233
CONSOLIDATeD CASh FLOW STATeMeNT for the year ended june 30, 2010
ballarpur industries l imited • annual report 2009–1078
All Amount in indiAn Rupees thousAnds except shARe dAtA
I. PRE-SPLIT AND BUYBACK oF EQUITY SHARES : a) 35,000 equity Shares of Rs. 10/- each allotted as fully paid up without payment being received in cash.b) 15,423,900-1/2 equity Shares of Rs. 10/- each allotted as fully paid up by way of Bonus Shares capitalised from General Reserve and Share
Premium Account.c) 950,000 equity Shares of Rs.10/- each fully paid up issued to Financial Institutions on part conversion of Loans/Debentures.d) 4,374,945 equity Shares of Rs.10/- each allotted as fully paid up to the Shareholders of Amalgamating Companies pursuant to the Schemes
of Amalgamation.e) 135,174 equity Shares of Rs.10/- each allotted as fully paid up on conversion of 237 - 4% euro Bonds of the Face Value of
uS$ 11,85,000/-.f) 11,887,469 equity Shares of Rs.10/- each allotted as fully paid up, in terms of Scheme of Arrangement & Reorganisation. g) 12,649,218 equity Shares of Rs.10/- each allotted as fully paid up, pursuant to the scheme of Arrangement & Amalgamation between the
Company and Bilt Graphic Papers Ltd. h) 21,160,820 equity share of Rs 10/- each allotted as fully paid up against Global Depository Shares (GDS) aggregating to uSD 35 Million. i) 92,775 equity Shares of Rs.10/- each allotted as fully paid up on conversion of 9.5 % Fully Convertible Debentures. j) 23,278,276 equity shares of Rs.10/- each allotted in the previous year at a premium of Rs. 76.20/- per share against conversion of Foreign
Currency Convertible Bonds (FCCB) of Face Value uS$ 45,000,000. II. PoST-SPLIT AND BUYBACK oF EQUITY SHARES : a) Pursuant to the Scheme of Arrangement and Reorganisation under Section 391 - 394 of the Companies Act 1956, approved by high Court of
Mumbai (Nagpur Bench) vide its order dated 30.11.2007 (Scheme), one equity Share of Rs. 10/- each was subdivided into five equity Shares of Rs. 2/- each and simultaneous compulsory buyback of two equity Shares of Rs. 2 each at a price of Rs. 25/- each per share. Consequently 371,414,860, equity Shares of Rs. 2/- each were bought back by the Company at a price of Rs. 25/- per share.
b) Pursuant to the Scheme, certain small shareholders, holding 1,598,451 equity share of Rs. 2/- each exercised their option for buyback at a price of Rs. 30/- per share. and were bought back by the Company.
c) During the year, The company had alloted the following equity shares to Bilt Paper holdings Limited (BPhL), a promoter: (i) 45,000,000 equity Shares at Rs. 30/- per share (face value of Rs. 2/- and Premium of Rs. 28/-) on 17th March 2010 and (ii) 55,000,000 equity Shares at Rs. 30/- per share (face value of Rs. 2/- and Premium of Rs. 28/-) on 11th June 2010. consequent upon conversion
of 55,000,000 unsecured zero coupon compulsory convertible bonds.
30.06.2010 30.06.2009
SCHEDULE "A": SHARE CAPITAL
AUTHoRISED
1487500000 equity Shares of Rs. 2/- each 2,975,000 2,975,000
(Previous Year 1487500000 equity Shares of Rs.2/- each)
10250000 (Previous Year 10250000) Preference shares of Rs. 100/- each 1,025,000 1,025,000
4,000,000 4,000,000
ISSUED
1030005910 equity Shares of Rs. 2/- each 2,060,012 1,860,012
(Previous Year 930005910 equity Shares of Rs. 2/- each)
2,060,012 1,860,012
SUBSCRIBED AND PAID UP
655773584 equity Shares of Rs. 2/- each 1,311,546 1,111,546
(Previous Year 555773584 equity Shares of Rs. 2/- each)
Less : 249745 equity Shares of Rs. 2/- each forfeited 499 499
(Previous Year 249745 equity Shares of Rs. 2/- each forfeited)
1,311,047 1,111,047
655523839 equity Shares of Rs.2/- each 1,311,047 1,111,047
Add: Forfeited Shares (Amount paid up) 187 187
1,311,234 1,111,234
CONSOLIDATeD SCheDuLeS “A” TO “L” attached to and forming part of the balance sheet as at June 30, 2010
Consol idated F inanCials 79
All Amount in indiAn Rupees thousAnds except shARe dAtA
30.06.2010 30.06.2009
SCHEDULE "B" RESERVES & SURPLUS
CAPITAL RESERVE oN CoNSoLIDATIoN 5,244,825 5,244,825
CAPITAL RESERVE
As per Last Account 151,546 151,546
SHARE PREMIUM ACCoUNT
As per Last Account 317,314 428,394
Add : Premium received on issue of equity share 2,800,000 –
Add : Security Premium on buyback uSD 8 mn ZCCB during the year – 96,651
Less : Security Premium Payable on redemption of ZCCB 185,342 207,731
2,931,972 317,314
PREFERENCE SHARE CAPITAL REDEMPTIoN RESERVE
As per Last Account 738,469 738,469
GENERAL RESERVE
As per Last Account 7,854,010 7,604,010
Add: Transferred from Profit & Loss Account 150,000 250,000
8,004,010 7,854,010
DEBENTURE REDEMPTIoN RESERVE
As per Last Account 300,000 375,000
Less: Transferred to Profit & Loss Account 75,000 75,000
225,000 300,000
FoREIGN CURRENCY TRANSLATIoN RESERVE
As per Last Account (2,379,215) (632,892)
Additions during the year (271,907) (1,746,323)
(2,651,122) (2,379,215)
BALANCE AS PER PRoFIT & LoSS ACCoUNT 6,477,958 4,965,216
21,122,658 17,192,165
CONSOLIDATeD SCheDuLeS “A” TO “L” attached to and forming part of the balance sheet as at June 30, 2010
ballarpur industries l imited • annual report 2009–1080
All Amount in indiAn Rupees thousAnds except shARe dAtA
30.06.2010 30.06.2009
SCHEDULE "C" SECURED LoANS Notes
Debentures (1) 900,000 1,200,000
Term Loans from Banks / Financial Institutions including external Commercial Borrowings (2) 2,964,525 3,947,301
Loan from Others (3) 16,768,905 23,109,789
20,633,430 28,257,090
30.06.2010 30.06.2009
SCHEDULE "D" UNSECURED LoANS
Compulsory Convertible Debentures 4,648,160 –
Fixed Deposits * 10,237 18,905
Loan from Banks 4,980,285 3,199,371
Zero Coupon Convertible Bonds (uS $ 52mn) 2,264,600 2,264,600
Zero Coupon Compulsory Convertible Bonds (uS $ 15mn) 697,224 729,657
Loan from Others 2,682,279 2,669,018
15,282,785 8,881,551
* unclaimed matured deposits will be credited to Investor education and Protection fund . The actual amount to be transferred to the Fund will be determined on respective due dates.
Notes1. These comprise of :- (a) The above Debentures of the Company are secured by parri-passu first charge created on all immoveable and moveable properties of
the Company both present and future. (b) The Debentures referred to above are redeemable at par, in one or more instalments, on various dates with earliest redemption being on
31st July 2010 and the last being due on 30th June 2013.The amount of Debentures due for redemption for the financial year 2010-11 is Rs. 3000 lacs.
2. The above Term loans & eCBs are secured by Parri Passu first charge created/to be created on all immoveable and moveable properties of the Company both present and future except eCB from hSBC and CITI Bank which is secured by the first parri passu charged on all the moveable properties of the company both present and future.Further in case of one of its subsidisry a fixed deposits of Rs. 214,800 thousands have been pledged to the bank as security for the outstanding bankers acceptances.
3. “Loan from others” includes foreign currency loan of uSD 145mn, which is secured by “parri-passu charge on fixed assets of Bilt Graphic Paper Product Limited” and pledge of shares of Ballarpur International Paper holdings B.V.
The Rupee term loan of 1000 crores is secured by parri-passu charge on the fixed assets of Bilt Graphic Paper Product Limited.
CONSOLIDATeD SCheDuLeS “A” TO “L” attached to and forming part of the balance sheet as at June 30, 2010
Consol idated F inanCials 81
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just
men
ts
& D
ispo
sals
du
ring
the
year
Tran
slat
ion
Rese
rve
Tota
l as
at
30th
Jun
e,
2010
As a
t 1s
t Jul
y,
2009
For
the
year
on S
ales
, Ad
just
men
ts
& D
ispo
sals
du
ring
the
year
Tran
slat
ion
Rese
rve
Tota
l as
at
30th
Jun
e,
2010
As a
t 30
th J
une,
20
10
As a
t 30
th J
une,
20
09
SCH
EDU
LE "
E" :
FIXE
D AS
SETS
A.Ta
ngib
le A
sset
s
Land
(in
clud
ing
leas
ehol
d la
nds)
1,0
75,8
75
261
–
2
0,69
5 1
,096
,831
5
7,24
8 9
,833
–
2
,481
6
9,56
2 1
,027
,269
1
,018
,627
Bui
ldin
gs 6
,897
,161
9
84,0
86
5,0
84
168
,261
8
,044
,424
3
,096
,372
2
44,5
78
391
1
13,3
78
3,4
53,9
37
4,5
90,4
87
3,8
00,7
89
Rai
lway
Sid
ings
, Tro
lley
Line
s, 1
,930
–
–
–
1
,930
1
,058
1
21
–
–
1,1
79
751
8
72
Tram
way
and
Tip
ping
Tub
s
Pla
nt, M
achi
nery
& e
quip
men
ts 5
3,17
8,67
2 8
,446
,317
31,
672
746
,918
6
2,34
0,23
5 1
6,97
0,04
4 2,
565,
105
30,6
71 4
65,3
62
19,9
69,8
4042
,370
,395
36,
208,
628
Furn
iture
, Fix
ture
s an
d 5
03,7
77
46,
536
4,6
81
11,
804
557
,436
3
41,6
39
32,
107
4,1
71
10,
655
380
,230
1
77,2
06
162
,138
Offi
ce e
quip
men
ts
Impr
ovem
ent t
o Le
ased
Ass
ets
130
,522
–
–
–
1
30,5
22
56,
157
1,3
09
–
–
57,
466
73,
056
74,
365
Vehi
cles
207
,638
3
4,31
8 1
1,11
7 4
,332
2
35,1
71
111
,302
1
9,76
5 11
,116
3,4
40
123
,391
111
,780
96,
336
Gas
Cyl
inde
rs 1
–
1
–
–
–
–
–
–
–
1
Pla
ntat
ion
2,6
77,3
42
286
,868
–
1
16,7
46
3,0
80,9
56
378
,227
9
8,41
2 –
1
8,14
1 4
94,7
80
2,5
86,1
76
2,2
99,1
15
B.In
tang
ible
Ass
ets
eRP
Pro
ject
586
,649
–
–
–
586
,649
387
,654
7
7,14
5 –
–
46
4,79
912
1,85
0 1
98,9
95
TOTA
L: T
his
Year
65,
259,
567
9,79
8,38
652
,555
1,0
68,7
56
76,
074,
154
21,
399,
701
3,0
48,3
75
46,
349
613
,457
2
5,01
5,18
4 5
1,05
8,97
0 4
3,85
9,86
6
TOTA
L: P
revi
ous
Year
49,
759,
410
15,
003,
592
600
,188
1
,096
,753
6
5,25
9,56
7 1
8,49
7,98
3 2
,478
,537
1
72,7
95
595
,976
2
1,39
9,70
1
Scra
p A
sset
s 1
,405
976
51,
060,
375
43,
860,
842
Not
es1.
B
uild
ings
incl
ude
Rs.
38,
969
thou
sand
s (
Pre
viou
s ye
ar R
s. 3
8,96
9 th
ousa
nds)
tow
ards
rev
alue
d va
lue
of o
wne
rshi
p fla
ts in
Co-
oper
ativ
e h
ousi
ng S
ocie
ties.
2.
The
Leas
e-A
gree
men
t in
resp
ect o
f 5.0
4 A
cres
of L
and
of u
nit S
ewa
in p
osse
ssio
n of
the
Com
pany
are
yet
to b
e ex
ecut
ed in
favo
ur o
f the
Com
pany
.
Leas
e D
eeds
hel
d in
the
nam
e of
ers
twhi
le a
mal
gam
atin
g C
ompa
ny S
ewa
Pap
er L
imite
d ar
e be
ing
mut
ated
in fa
vour
of t
he C
ompa
ny.
3.
Dep
reci
atio
n du
ring
the
year
incl
ude
:
– R
s. 1
3,64
7 th
ousa
nds
( P
revi
ous
Year
Rs.
112
00 th
ousa
nds
) c
harg
ed to
Inve
ntor
ies.
– R
s.14
,664
thou
sand
s (
Pre
viou
s Ye
ar R
s. 1
2500
tho
usan
ds )
cha
rged
to P
lant
atio
n.
– R
s. 1
211
thou
sand
s (P
revi
ous
Year
129
306
thou
sand
s) a
lloca
ted
to P
roje
ct D
evel
opm
ent e
xpen
ditu
re.
4.
Dur
ing
the
year
, the
com
pany
has
adj
uste
d th
e fo
reig
n cu
rren
cy d
iffer
ence
s on
am
ount
s bo
rrow
ed fo
r ac
quis
ition
of f
ixed
ass
ets
rela
ting
to p
roje
ct u
nder
con
stru
ctio
n, to
the
carr
ying
cos
t of f
ixed
ass
ets
unde
r he
ad c
apita
l wor
k in
pro
gres
s. A
ccor
ding
ly a
djus
tmen
t for
Rs
695.
95 L
acs
was
mad
e to
the
cost
of r
elat
ed fi
xed
asse
ts.
All
Amou
nt in
indi
An R
upee
s th
ousA
nds
exce
pt s
hARe
dAt
A
CON
SOLI
DAT
eD S
CheD
uLe
S “A
” TO
“L”
atta
ched
to a
nd fo
rmin
g pa
rt o
f the
bal
ance
she
et a
s at
Jun
e 30
, 201
0
ballarpur industries l imited • annual report 2009–1082
All Amount in indiAn Rupees thousAnds except shARe dAtA
30.06.2010 30.06.2009
Particulars Face Value or Nos.
Book Value Face Value or Nos.
Book Value
SCHEDULE "F" : INVESTMENTS
GoVERNMENT SECURITIES :
7 - Year National Saving Certificates Rs. 3000 3 Rs. 3000 3
6 - Year National Saving Certificates Rs. 21,500 21 Rs. 31,200 31
(Lodged as Security Deposit)
5 - Year Kisan Vikas Patra Rs. 2000 2 Rs. 2000 2
(Lodged as Security Deposit)
oTHER INVESTMENTS
AVANThA POWeR & INFRASTRuCTuRe LTD. 38584000 405,268 38584000 381,108
(formerly known as Bilt Power Ltd.)
Fully paid equity Shares of Rs.10/- each.
Blue horizon Investment Limited 5000 335 5000 335
Fully Paid equity Shares of Rs 10/- each
405,629 381,479
In Government Securities 26 36
In Fully Paid equity Shares 405,603 381,443
405,629 381,479
Break-up :
unquoted Investments 405,603 381,443
Others :
Government Securities & Bonds 26 36
405,629 381,479
CONSOLIDATeD SCheDuLeS “A” TO “L” attached to and forming part of the balance sheet as at June 30, 2010
Consol idated F inanCials 83
All Amount in indiAn Rupees thousAnds except shARe dAtA
30.06.2010 30.06.2009
SCHEDULE "G": INVENToRIES
(As valued and certified by the Management)
Raw Materials 2,567,065 1,055,859
Stock of Stores, Spare Parts, Chemicals etc. 2,497,615 2,013,335
Block Stores 34,090 36,169
Raw Materials and Stores-in-Transit 996,135 337,377
Stock-in-Trade :
Finished Stock - 909,903 779,220
At cost or net realisable value whichever is lower
Stock-in-Process - 687,852 639,343
7,692,660 4,861,303
SCHEDULE "H": SUNDRY DEBToRS
Debts outstanding for a period exceeding six months :
Secured -
Considered Good 24,377 17,581
unsecured -
Considered Good
Due from Others 101,351 115,911
Considered Doubtful
125,728 133,492
Other Debts :
Secured -
Considered Good 61,787 218,211
unsecured -
Considered Good
Due from Others (Net of Bills Discounted) 4,417,792 2,908,391
4,479,579 3,126,602
4,605,307 3,260,094
SCHEDULE "I": CASH AND BANK BALANCES
Cash on hand 94,588 36,218
Bank Balances :
With Scheduled Banks -
On Current Accounts 78,324 43,338
On Margin Money Accounts 8,477 11,477
On Fixed Deposit Accounts 1,771,583 481,165
(lodged as security deposits Rs. 218,352 thousands)
On employees' Security Deposit Account in Savings Bank 307 302
On Compulsory Buyback 19,373 20,021
On Optional Buyback 207 247
On unpaid Dividend Accounts 13,637 14,671
1,891,908 571,221
With Non-Scheduled Banks -
On Current Accounts 430,276 435,794
2,416,772 1,043,233
CONSOLIDATeD SCheDuLeS “A” TO “L” attached to and forming part of the balance sheet as at June 30, 2010
ballarpur industries l imited • annual report 2009–1084
All Amount in indiAn Rupees thousAnds except shARe dAtA
30.06.2010 30.06.2009
SCHEDULE "J": LoANS AND ADVANCES
unsecured - Considered Good
Advances, Deposits and Prepaid expenses recoverable in cash or in kind or for to be received 4,576,719 3,492,517
Balance with Customs and excise Authorities 1,982,620 1,455,439
Advance Tax , Tax deducted at Source (including Income Tax refund receivable) 2,847,325 2,275,174
MAT Credit entitlement 782,372 563,344
10,189,036 7,786,474
Other Advances include amount advanced to Directors Rs. 2831 thousands
(Maximum amount outstanding at any time during the year Rs.3162 thousands)
SCHEDULE "K": CURRENT LIABILITIES AND PRoVISIoNS
A. CURRENT LIABILITIES
For Acceptances 3,480,674 367,394
Sundry Creditors - Micro, Small and Medium enterprises 30,866 21,156
Sundry Creditors - Capital Goods 213,728 223,214
Sundry Creditors - Others (Includes Interest free sales tax loan/deferral) 6,368,311 4,439,291
Security Deposits (including Interest accrued thereon) 458,503 236,137
Advances received from Customers 80,344 16,373
Provision on security premium payable on redemption of ZCCB 817,068 631,727
Trustees Staff Welfare Account 527 527
unclaimed Dividend / Dividend Payable * 13,610 14,644
employees Security Deposit 307 302
unclaimed Compulsory Buyback Consideration 19,373 20,021
unclaimed Optional Buyback Consideration 207 247
Commission payable to Chairman, MD and other Directors 21,859 26,016
Interest on Loans accrued but not due 119,960 70,590
11,625,337 6,067,639
B. PRoVISIoNS
Taxation including MAT 2,619,843 2,152,580
Proposed Dividend 327,762 277,762
Provision for Dividend Tax 54,437 47,206
Provision for employee Benefits 623,820 534,989
3,625,862 3,012,537
15,251,199 9,080,176
* Includes amount to be transferred to Investor education and Protection Fund which will be determined on the respective due dates.
AS AT 01.07.2009
EXPENDITURE DURING THE
YEAR
wRITTEN oFF DURING THE YEAR (NET)
BALANCE AS AT 30.06.2010
SCHEDULE "L : MISCELLANEoUS EXPENDITURE
(To the extent not written off or adjusted)
VRS/eRS Compensation 192,852 – 192,852 –
Share Issue expenses 14,986 – 4,995 9,991
207,838 – 197,847 9,991
CONSOLIDATeD SCheDuLeS “A” TO “L” attached to and forming part of the balance sheet as at June 30, 2010
Consol idated F inanCials 85
All Amount in indiAn Rupees thousAnds except shARe dAtA
30.06.2010 30.06.2009
SCHEDULE "I": SALES
Paper (including coated) 35,772,113 27,964,608
Less: Discount 873,565 287,838
34,898,548 27,676,770
Caustic Soda, Chlorine etc. 56,880 40,285
Pulp 3,424,852 1,153,720
Others (including traded goods) 583,782 565,722
38,964,062 29,436,497
SCHEDULE "II" : OTHER INCOME
Interest on Investments 126 133
Foregin Currency Fluctuation (Net) 108,553 452
Profit on Sales of Stores, Raw Materials, Scrap etc. 18,950 20,208
Rent and Licence Fee (Gross) 8,342 5,837
Miscellaneous Income 100,918 82,713
Profit on Sale of Assets (Net) 1,667 5,027
Gain arising on buyback of Zero Coupon Convertible Bonds – 17,420
238,556 131,790
SCHEDULE "III": INCREASE/(DECREASE) IN STOCKS
Opening Stock :
Finished 779,220 573,356
In Process 639,343 200,409
1,418,563 773,765
Add : Stock of pre-operative stage at (BGPPL)
Finished 16,259 61,684
In Process 33,781 108,661
1,468,603 944,110
Closing Stock :
Finished 909,903 779,220
In Process 687,852 639,343
1,597,755 1,418,563
Net Increase/(Decrease) on Stocks 129,152 474,453
SCHEDULE "IV": MANUFACTURING COSTS
Raw Materials consumed (including Expenses thereon) 12,396,197 8,182,457
Stores and Spare Parts consumed 6,811,623 5,250,617
Excise duty on year end inventory of Finished Goods 6,080 (439)
Power, Fuel and Water Charges 5,464,884 4,418,490
Repairs and Maintenance - Buildings 35,495 40,381
Repairs and Maintenance - Plant & Machinery 434,423 271,205
Repairs and Maintenance Sundries 97,021 65,114
Processing Charges 90,253 110,107
Lease charges of Machinery 325 325
Other Expenses 185,996 358,261
25,522,297 18,696,518
CONSOLIDAtED SChEDuLES “I” tO “VIII” attached to and forming part of the profit & loss account for the year ended june 30, 2010
ballarpur industries l imited • annual report 2009–1086
All Amount in indiAn Rupees thousAnds except shARe dAtA
30.06.2010 30.06.2009
SCHEDULE "V": PERSONNEL COSTS
Salaries, Wages, Bonus and Gratuity 2,120,554 1,882,240
Directors' Commission on Profits - Gross 21,859 26,016
Contribution to Provident, Superannuation & Other Funds 154,194 148,626
Workers and Staff Welfare Expenses 186,286 134,348
2,482,893 2,191,230
SCHEDULE "VI": ADMINISTRATION, SELLING & MISCELLANEOUS COSTS
Rent 5,062 3,814
Lease Rent 6,303 9,203
Rates and taxes 22,748 17,520
Insurance Charges 87,726 78,262
Directors Fees 1,632 2,359
Debenture trustee Remuneration 317 364
Office & Other Expenses 471,371 379,494
(including Rs. 2119 thousands for Research & Development)
Commission 22,750 7,870
Carriage and Freight 562,195 308,081
Other Selling Expenses 168,063 96,256
Assets Discarded 5,346 41
Bad Debts and Claims written off / provided for 18,636 –
Foreign Exchange Rate Fluctuation (Net) 52 12,699
1,372,201 915,963
Less: unspent Liabilities and excess provisions in respect of earlier years Written Back 11,705 29,472
1,360,496 886,491
SCHEDULE "VII": INTEREST AND FINANCE COSTS
Interest :
On Debentures and Fixed Loans 912,712 307,136
On Other Accounts 1,317,290 1,242,478
Other Finance Charges 368,537 367,278
2,598,539 1,916,892
Less: Interest earned 227,451 208,696
2,371,088 1,708,196
CONSOLIDAtED SChEDuLES “I” tO “VIII” attached to and forming part of the profit & loss account for the year ended june 30, 2010
Consol idated F inanCials 87
SCHEDULE “VIII”: SIGNIFICANT ACCOUNTING POLICIES AND NOTES1. SIGNIFICANT ACCOUNTING POLICIES A. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS the Consolidated Financial Statements have been prepared in accordance with Accounting Standard 21 (AS 21), “Consolidated Financial
Statements” and Accounting Standard 23 (AS 23), “Accounting for Investments in Associates in Consolidated Financial Statements”, issued by the Institute of Chartered Accountants of India.
B. FIXED ASSETS -TANGIBLE 1. Fixed Assets other than those which have been revalued are stated at Cost Net of CENVAt/Value Added tax, rebates, less accumulated
depreciation and impairment loss, if any. 2. All costs, including costs till commencement of commercial production, net charges on foreign exchange contract and adjustments
arising from exchange rate variations attributable to fixed assets are capitalized. 3. Pre-operative expenditure: Indirect expenditure incurred during construction period is capitalized under the respective asset head as a part of the indirect
construction cost, to the extent to which the expenditure is indirectly related to the assets head. Other Indirect expenditure incurred during the construction period, which is not related to the construction activities or which is not incidental thereto is written off in the profit and loss account.
C. DEPRECIATION Depreciation on Fixed Assets is provided on Straight Line Method on certain Assets and on Written down Value Method on other Assets
in accordance with Schedule XIV of the Companies Act, 1956, except in case of one of the Company’s foreign subsidiary, depreciation is charged so as to write off the depreciable amount of assets over their estimated useful lives using the straight-line method and improvements to leased premises which are amortised over the period of lease. Land is not depreciated. Depreciation on revalued portion of fixed Assets, as applicable, is appropriated and adjusted out of Revaluation Reserve if available with the Company, on a global pooling basis and the balance is charged off in Accounts.
D. FIXED ASSETS -INTANGIBLE Assets identified as intangible assets are stated at cost including incidental expenses thereto, and are amortised over a predetermined
period. E. INVENTORY VALUATION Raw Materials, Stores, Spare Parts, Chemicals etc., are valued at cost, computed on weighted average basis. Finished goods and work in
process are valued at cost or net realisable value, whichever is lower. In the case of finished goods and work in process cost comprises of material, direct labour and applicable overhead expenses. the cost of finished goods also includes applicable excise duty.
F. INVESTMENTS (a) Investments made by the Company in various securities are primarily meant to be held over a long-term period. (b) (i) holding of certain Investments is of strategic importance to the Company and therefore, the Company does not consider
it necessary to provide for decrease in the Book Value of such Investments, till continuation of the relationship of strategic importance with the Investee Company, namely that of a Subsidiary, Associate, Company under the same management, Foreign Joint Ventures and/or Company associated with Avantha Group.
(ii) however, appropriate provisions are made to recognise decrease in the Book Value of Investments in companies of Strategic importance also, as and when the Investee Company is either wound up or goes into liquidation or where the operations cease or are taken over by Receiver by Operation of Law.
(c) Investments in Government Securities are shown at cost and Investments, other than that of Strategic Importance to the Company are shown in the books at lower of cost or fair market value.
(d) As a conservative and prudent policy, the Company does not provide for increase in the Book Value of individual investments held by it on the date of Balance Sheet.
G. DIVIDEND Provision for Dividend, as proposed by the Directors, is made in the books of account, pending approval of the Shareholders at the Annual
General Meeting. H. FOREIGN CURRENCY TRANSACTIONS (i) Initial Recognition Foreign currency transaction are recorded in Indian rupees being the reporting currency, by applying to the foreign currency amount,
the exchange rate between the reporting currency and the foreign currency at the respective dates of the transaction. (ii) Conversion Foreign currency monetary items are reported using the closing rate as at the year end. Non-monetary items which are carried in
terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction. (iii) Exchange Differences Exchange differences arising on the settlement of monetary items or on reporting the company’s monetary items at rates different
from those at which they were initially recorded during the financial year are recognized as income or as expenses in the financial year in which they arise except for adjustment of exchange difference arising on reporting of long term foreign currency monetary items in so far they related to the acquisition of a depreciable capital assets which are adjusted to the cost of the assets.
CONSOLIDAtED SChEDuLES “I” tO “VIII”
ballarpur industries l imited • annual report 2009–1088
(iv) the operation of foreign subsidiaries which are considered as non-integral operations, their financial statements are translated at the following exchange rates:
(a) Revenue and Expenses : at the average exchange rate during the year (b) Current assets and current liabilities : Exchange rate prevailing at the end of the year (c) Fixed Assets : Exchange rate prevailing at the end of the year (d) Share Capital : At the Original rate when the capital was infused the resultant Exchange difference is accounted as Foreign Currency translation Reserve until the disposal of the net Investment. I. REVENUE RECOGNITION As per the requirement of the Companies (Amendment) Act, 1988, all Expenses and Income are accounted for on accrual basis. J. RESEARCH & DEVELOPMENT Revenue expenditure on Research and Development is charged to the Profit & Loss Account in the year in which it is incurred. Capital
Expenditure on Research and Development is shown as an addition to Fixed Assets or Work in Progress, as the case may be. K. RETIREMENT BENEFITS Short term employee benefits are charged off in the year in which the related services are rendered. Post employment and other long term employee benefits are charged off in the year in which the employee has rendered services. the
amount charged off is recognized at the present value of the amount payable determined using actuarial valuation techniques. Actuarial gain and losses in respect of post employment and other long term benefits are charged to Profit & Loss Accounts.
L. INCOME FROM INVESTMENTS Income from Investments, where appropriate, is taken to revenue in full on declaration or receipt and tax deducted at source thereon is
treated as advance tax. M. ADVANCE LICENSE, IMPORT ENTITLEMENTS Advance License, Import Entitlements are recognized at the time of export and the benefit in respect of advance License received by the
Company against export made by it as recognized as and when goods are imported against them. N. TAXATION Provision for Current tax is made on the basis of estimated taxable income for the relevant accounting year in accordance with the Income
tax Act, 1961. the deferred tax liability on account of timing differences between the book profits and the taxable profits for the year is accounted by
applying the tax rates as applicable as on the balance sheet date. Deferred tax assets arising from timing differences are recognised on the Principles of virtual certainty that these would be realised in
future. O. IMPAIRMENT OF ASSETS the company applies the test of Impairment of certain assets as provided in Accounting Standard (AS) – 28 “Impairment of Assets”. P. PROVISION AND CONTINGENCIES the Company create a provision when there is a present obligation as a result of past events that probably require an outflow of resources
and a reliable estimate can be made of the amount of obligation. A disclosure for a contingent liability is made, when there is a possible obligation or a present obligation that probably will not require an outflow of resources or where a reliable estimate of the obligation cannot be made.
Q. SHARE PREMIUM ACCOUNT: UTILISATION Debenture / Share / Zero Coupon Convertible Bonds issue expenses incurred and premium payable on Zero Coupon Convertible Bonds
are adjusted in the same year against the Securities Premium Account as permitted by section 78(2) of the Companies Act, 1956. 2. the Consolidated Financial Statements comprise of the financial statements of Ballarpur Industries Limited (the Company) for year ended
30th June 2010 and its following Subsidiaries and Associate
Name of the Company Country of Incorporation Proportion of Ownership Interest either directly or through subsidiary
As at 30th June 2010
Subsidiary
Bilt tree tech Limited India 91.67%
Ballarpur Speciality Paper holdings B.V. Netherlands 100%
Ballarpur International holdings B.V. Netherlands 100%
Ballarpur Packaging holdings B.V. Netherlands 100%
Step down Subsidiary
Ballarpur Paper holdings B.V. Netherlands 100%
Sabah Forest Industries Sdn. Bhd. Malaysia 97.78%
Ballarpur International Graphic Paper holdings B.V. Netherlands 79.53%
Ballarpur International Paper holdings B.V. Netherlands 100%
Ballarpur International Packaging holdings B.V. Netherlands 100%
Bilt Graphic Paper Products Limited India 100%
CONSOLIDAtED SChEDuLES “I” tO “VIII”
Consol idated F inanCials 89
(a) the Consolidated Financial Statements of the Company and its Subsidiaries have been prepared in accordance with uniform Accounting Policies and Generally Accepted Accounting Principles in India. Further investment in Associate Company has been accounted for as per the equity method in accordance with AS-23.
(b) the Company has disclosed only such Policies and Notes from the individual financial statements, which fairly cover the required disclosures.
3. CONTINGENT LIABILITIES (a) Rs 754.30 Crores (30th June, 2009 Rs 625.65 Crores) approximately being claims against the Company not acknowledged as debts. (b) the future obligation for the rentals under a Financial Lease Agreement entered into, by the Company for certain assets taken on lease
by another Company amounts to Rs.0.021 Crores (30th June, 2009 Rs. 0.057 Crores).4. Guarantees given by bankers on behalf of the Company remaining outstanding and Bills Discounted with Banks remaining outstanding amount
to Rs.56.29 Crores (30th June, 2009 Rs. 52.42 Crores).5. Estimated amount of contracts remaining to be executed on Capital Account Rs 713.69 Crores (Net of Advances) (30th June, 2009 Rs. 617.26
Crores).6. the company has operating leases for various premises and for other assets, which are renewable on a periodic basis and cancellable at its
option. Rental expenses for operating leases charged to Profit & Loss Account for the year are Rs.1.11 Crores. (Previous Year Rs. 1.30 Crores). As of 30th June, 2010, the future minimum lease payments for non-cancellable operating leases are as below :-
– Not later than one year from 30th June, 2010 - Rs. 0.18 Crores – Later than one year and not later than five years - Nil Crores7. a) the unit Bhigwan had imported certain Plant and Machinery at ‘nil’ customs duty under the Export Promotion Capital Goods (EPCG)
Scheme. under the scheme, the unit was obliged to export goods aggregating uSD 321 million, which is equivalent to six times the CIF value of the machinery imported. the unit was required to meet this export obligation over a period of 8 years (four blocks of 2 years each) starting January 12, 1996. the unit had been granted an extension in the period for fulfilling the export obligation from 8 years to 12 years till January 11, 2008, which had further been extended up to January 11, 2010. the Director General of Foreign trade, on an application by the Company has further reduced the Export Obligation by uSD 94.12 Million and has re-fixed the export obligation to uSD 226.85 Million. the unit has achieved total export of uSD 229.22 Million (including the exports made by unit Ballarpur during the year 2009-10) as on 31st December,2009 and has submitted the required documents to the Director General of Foreign trade on 12.03.2010 for issuance of Export Obligation Discharge Certificate.
b) unit Ashti has imported certain Plant and Machinery at concessional rate of custom duty under 5% Export Promotion Capital Goods (EPCG) scheme. the unit has been granted two licenses, accordingly the unit is obliged to export goods amounting uSD$ 9.17 million, which is equivalent to eight and half times the duty saved on import of machinery. the unit is required to meet this export obligation over period of eight years starting 17th March 2005. the unit has achieved total export of uSD 8.68 million as on 30.06.10. As such the liability that may arise for non-fulfillment of export obligation is currently non-ascertainable.
8. Disclosures required under the Micro Small and Medium Enterprises Development Act, 2006. (“the Development Act”) delayed payment due as at end of the year on account of principal - Rs. 128.27 lacs (Previous Year Rs. NIL lacs) and interest due thereon Rs. 3 lacs (Previous Year Rs. NIL lacs).
9. the disclosure required under Accounting Standard 15 ”Employee Benefits” notified in the Companies (Accounting standards) Rules 2006, are given below:
Defined Contribution Plan Contribution to Defined Contribution Plan is recognized and charged to various account heads including Capital Expenditure for the year, are
as under:
Sr. No.
Defined Contribution Plan 2009-10(Rs. “000”)
2008-09(Rs. “000”)
Contribution to defined contribution plan is recognized and charged off for the year, are as under :
1 Employer’s Contribution in Provident Fund 618.68 569.07
2 Employer’s contribution in Superannuation Fund 146.01 140.76
3 Employer’s Contribution in Pension Scheme 424.41 432.72
Defined Benefit Plan: the present value of obligation is determined based on actuarial valuation using Projected unit Credit Method, which recognizes each period
of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. the obligation for Leave Encashment is recognized in the same manner as gratuity.
CONSOLIDAtED SChEDuLES “I” tO “VIII”
ballarpur industries l imited • annual report 2009–1090
2009-10 2008-09
(Rs. “000”) (Rs. “000”)
Sr. No.
Defined Benefit Plan Gratuity Funded
(Rs. Lacs)
Gratuity Unfunded (Rs. Lacs)
EncashmentUnfunded(Rs. Lacs)
Gratuity Funded
(Rs. Lacs)
Gratuity Unfunded(Rs. Lacs)
EncashmentUnfunded(Rs. Lacs)
a. Reconciliation of Opening and closing of Defined Benefit Obligation
Defined benefit obligation at beginning of the year 184.30 4,629.10 658.17 142.01 4,530.53 650.83
Current Service Cost 29.22 378.95 105.25 15.43 339.19 74.77
Interest Cost 17.18 367.21 50.55 12.21 338.89 47.78
Actuarial (gain)/loss 33.20 414.61 94.77 24.24 339.51 92.23
Benefit paid (23.65) (618.35) (159.75) (9.59) (919.02) (207.44)
Plan Amendments 5.03 200.76 – – – –
Defined benefit obligation at year end 245.28 5,372.28 748.99 184.30 4,629.10 658.17
b. Reconciliation of opening and closing balance of fair value of plan assets
Fair value of plan assets at beginning of the year 121.68 – – 103.63 – –
Expected return on plan assets 9.73 – – 9.22 – –
Actuarial gain/ (loss) 0.35 – – 1.94 – (10.41)
Employer contribution 20.24 (618.35) (159.75) 16.48 919.01 207.44
Benefit Paid (23.65) (618.35) (159.75) (9.59) (919.01) (207.44)
Fair Value of plan assets at year end 128.35 – – 121.68 – (10.41)
Actual return on plan assets 10.09 – – 11.16 – –
c. Reconciliation of fair value of assets and obligations
Fair value of plan assets as at 30th June, 2010 128.35 – – 121.68 – –
Present value of obligation as at 30th June, 2010 245.28 5,372.28 748.99 184.30 4,629.10 658.17
Amount recognized in Balance Sheet 116.93 5,372.28 748.99 62.62 4,629.10 658.17
d. Expenses recognized during the year
(under the head “payments to and
Provisions for Employees”)
Current Service Cost 29.22 378.95 105.25 15.43 339.19 74.77
Interest Cost 17.18 367.21 50.55 12.21 338.89 47.78
Expected return on plan assets 9.73 – – 9.22 – –
Past Service cost 5.03 (0.14) – – – –
Actuarial (gain)/loss 32.85 414.61 94.77 22.30 339.51 102.64
Plan Amendments – 200.76 – – – –
Net Cost 94.01 1,361.39 250.57 59.16 1,017.58 225.19
e. Discount rate (per annum)
Expected rate of return on plan assets (per annum)
7.50% 7.50%/8% 7.50%/8% 8% 7.50%/8% 7.50%/8%
Rate of escalation in salary considered in actuarial valuation, taken into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. the above information is certified by the actuary.
Note: * Discount rate (per annum) in case of Ballarpur Industries Limited is 7.50% and in case of Bilt Graphic Paper Products Limited - unit Kamlapuram is 7%,unit Ballarpur 7.50% and unit Bhigwan 8%.
10. MISCELLANEOUS EXPENDITURE - DEFERRED REVENUE EXPENDITURE a. Share Issue expenses are being written off over a period of five years. b. Compensation paid under the Approved Voluntary Retirement Scheme for its employees have been treated as Deferred Revenue Expenditure,
which was being written off over a period of five years or up to 31st March 2010, whichever is earlier.
CONSOLIDAtED SChEDuLES “I” tO “VIII”
Consol idated F inanCials 91
11. the Provision for taxation for the year is the aggregate of the provision made for nine months ended 31.03.10 and three months ended 30.06.10. the ultimate tax liability shall however be based on the previous year as defined in the Income tax Act.1961. the deferred tax Assets and Liabilities as on 30.06.10 and 30.06.09 comprising timing difference on accounts of :-
Particulars Deferred Tax Asset
Amount(Rs. ‘000)
30.06.2010
Amount(Rs. ‘000)
30.06.2009
Expenses allowable on payment basis 47,859 36,806
Provision for Gratuity & Others 207,168 181,658
unabsorbed capital allowance 490,739 –
Total 745,766 218,464
Deferred Tax Liability
higher Depreciation claimed under tax laws (net of unabsorbed depreciation) 2,657,278 1,992,229
Deferred revenue expenditure & others 2,743 4,378
Total 2,660,021 1,996,607
Net Deferred tax Asset (Liability) (1,914,255) (1,778,143)
In case of namely Ballarpur International holdings B.V, Ballarpur Paper holdings B.V., Ballarpur International Graphic Paper holdings B.V., Ballarpur International Paper holdings B.V., Net deferred tax assets shall be recognised as and when there is a virtual certainty for recovery there-of.
12. Construction and Installation in Progress and Advances against Capital Assets include expenses and interest related to ongoing Projects at various units of the Company.
13. Accounts with certain Financial Institutions, Banks and Companies are subject to reconciliation; however these will not have any significant impact on the profit for the year and on the net worth of the Company as on the Balance Sheet date.
14. Segment Reporting the Company has identified business segment as the primary segment after considering all the relevant factors. the Company's manufactured
products are sold primarily within India and as such there are no reportable geographical segment. the Expenses, which are not directly identifiable to a specific business segment are clubbed under “unallocated Corporate Expenses” and
similarly, the common assets and liabilities, which are not identifiable to a specific segment are clubbed under “unallocated Corporate Assets/ Liabilities" on the basis of reasonable estimates.
Particulars Year Paper Paper Products &
office supplies
Pulp Others Total
RevenuesGross sale to External Customers 2009-10 30,852,629 3,986,278 3,424,852 700,303 38,964,062 Excise Duty 2009-10 (894,026) (118,750) – (5,334) (1,018,110)Gross sale to External Customers 2008-09 24,499,535 3,177,235 1,153,721 606,006 29,436,497 Excise Duty 2008-09 (1,021,517) (158,304) – (9,754) (1,189,575)total Segment Revenues (Net Of Excise) 2009-10 29,958,603 3,867,528 3,424,852 694,969 37,945,952
2008-09 23,478,018 3,018,931 1,153,721 596,252 28,246,922 Segment Results 2009-10 4,645,540 277,790 576,825 (45,148) 5,455,007
2008-09 4,301,993 318,345 (198,419) (43,186) 4,378,733 Less: unallocated Corporate Expenses 2009-10 290,233(Net of other income) 2008-09 146,696Profit Before Interest and tax 2009-10 5,164,574
2008-09 4,232,037 Interest (Net of Income) 2009-10 2,371,088
2008-09 1,708,196 Profit Before tax 2009-10 2,793,486
2008-09 2,523,841 Provision For tax-Current tax (Net of MAt Entitlement Credit) 2009-10 253,312
2008-09 115,270 -Deferred tax 2009-10 136,112
2008-09 513,469 -Fringe Benefit tax 2009-10 –
2008-09 16,325 Net Profit 2009-10 2,404,062
2008-09 1,878,777
CONSOLIDAtED SChEDuLES “I” tO “VIII”
ballarpur industries l imited • annual report 2009–1092
Particulars Year Paper Paper Products &
office supplies
Pulp Others Total
Minority Interest 2009-10 434,121 2008-09 211,640
Share of Profit in Associates 2009-10 – 2008-09 15,800
Net Profit after Minority Interest and Share 2009-10 1,969,941of Profit in Associates 2008-09 1,682,937 Other InformationSegmental Assets 2009-10 66,469,314 3,955,464 4,089,732 3,201,289 77,715,799
2008-09 58,112,327 3,610,093 4,472,878 1,920,763 68,116,061 unallocated Corporate assets 2009-10 1,909,968
2008-09 1,860,383 total Assets 2009-10 79,625,767
2008-09 69,976,444 Segmental Liabilities 2009-10 9,638,953 607,894 456,232 936,200 11,639,279
2008-09 4,854,276 513,293 423,864 895,871 6,687,304 unallocated Corporate Liabilities 2009-10 3,611,920
2008-09 2,392,872 total Liabilities 2009-10 15,251,199
2008-09 9,080,176 Capital Expenditure during the period 2009-10 4,472,087(Including Movements in CWIP & 2008-09 13,727,655 Capital Advances)Depreciation 2009-10 3,018,853
2008-09 2,325,531 Amortisation 2009-10 197,847
2008-09 103,710 Total Liabilities ExcludeSecured Loans 2009-10 20,633,430
2008-09 28,257,090 unsecured Loans 2009-10 15,282,785
2008-09 8,881,551 Deferred tax Liabilities 2009-10 1,914,255
2008-09 1,778,143 Minority Interest 2009-10 4,110,206
2008-09 3,676,085
All Amount in indiAn Rupees thousAnds except shARe dAtA
CONSOLIDAtED SChEDuLES “I” tO “VIII” attached to and forming part of the profit & loss account for the year ended june 30, 2010
Consol idated F inanCials 93
15. Information on Related Parties as required by Accounting Standard -18 “Related Party Disclosures”. I. Enterprise in which. Key Management Personnel has significant influence APR Sacks Limited ASA Agencies (P) Limited Asia Aviation Limited Avantha holdings Limited (formerly known as NewQuest Corporation Limited) Avantha Power & infrastructure Limited Avantha Realty Limited (formerly known as Janpath Investments and holdings Limited) Avantha technologies Limited (earlier NewQuest Process Outsourcing Private Limited) Bilt Industrial Packaging Company Limited Biltech Building Elements Limited Crompton Greaves Limited Global Green Company Limited Imerys Newquest (India) Private Limited Krebs & Cie (India) Limited Mirabelle trading Pte. Limited Salient Business Solutions Ltd. Solaris Chemtech Industries Limited (earlier Solaries Bio Chemicals Ltd.) Solaris holdings Ltd. the Paparbase Company Limited uhL Power Company Limited II. Detail of transactions with related parties : (Financial Transactions have been carried out in the ordinary course of business and/or in discharge of contractual obligation)
Sl. No.
Particulars 30.06.2010Rs. “000”
30.06.2009Rs. “000”
a. Sales of goods, rent received & allocation of common expensesfor rendering corporate service:– Other Related Parties 5,952 5,873
b. Purchase of goods & service :– Other Related Parties 12,75,269 15,91,387
c. Investment made during the year::– Other Related Parties – 1,99,108
d. RemunerationKey Management Personnel 1,35,553 1,16,314
e. Outstanding balances as at 30th June,2010:– Other Related Parties – Loans, Advances & Debtors 6,34,214 7,66,807– Key Management Personnel – Advances 2,831 3,162
All Amount in indiAn Rupees thousAnds except shARe dAtA
CONSOLIDAtED SChEDuLES “I” tO “VIII” attached to and forming part of the profit & loss account for the year ended june 30, 2010
ballarpur industries l imited • annual report 2009–1094
As per our report attachedDINESH KUMAR BACHCHASPartner Membership No. 097820For and on behalf ofK. K. MANKESHwAR & CO.Chartered AccountantsFRN: 106009W
New Delhi, dated the19th August, 2010
GAutAM thAPARchairmanR. R. VEDERAhmanaging directorB. hARIhARANgroup director (finance)VIVEK KuMAR GOYALchief financial officerAKhIL MAhAJANcompany secretary
New Delhi, dated the19th August, 2010
Current YearRs. “000”
Previous YearRs. “000”
16. Earnings Per Share I Profit Computation for both Basic and Diluted Earnings Per Share of Rs. 2/- each
Net Profit After tax, Minority Interest and Share of Profit in Associate available to 1,969,941 16,82,937Convertible Bonds/DebenturesNet Profit available to Equity Shareholders For Diluted EPS 1,969,941 1,682,937
II Weighted Average number of Equity Share for Earnings Per Share ComputationA) No. of shares for Basic Earnings Per Share 57,16.06,031 55,55,23,839
Add: Effect of potential equity shares on conversion of Zero Coupon Convertible Bonds 6,43,22,070 6,43,22,070B) No. of shares for Diluted Earning Per Share 63,59,28,101 61,98,45,909
III Earnings Per Share Basic (Rs.) 3.45 3.03 Diluted (Rs.) 3.11 2.72
17. Figures pertaining to the Subsidiary Companies have been reclassified wherever necessary to bring them in line with the Company’s Financial Statements.
18. Figures for the previous year have been re-arranged and regrouped, wherever necessary to make them comparable to the classification of current year.
Signatures to Schedules “A” to “L” and “I” to “VIII”
All Amount in indiAn Rupees thousAnds except shARe dAtA
CONSOLIDAtED SChEDuLES “I” tO “VIII” attached to and forming part of the profit & loss account for the year ended june 30, 2010
Consol idated F inanCials 95
NOtES
ballarpur industries l imited • annual report 2009–1096
NOtES